I didn’t expect to use the term “rock star” in a story about the tax collector’s office, ever.
So I was skeptical when a Key West hotelier used it to describe Pamela Sellers, director of audits and enforcement in the tax office. The job title did little to assuage my doubts and I was about to chastise our hotelier friend for his overblown description. A rock-star tax auditor? No way.
Then I spoke with Sellers. She rocks.
She also fights crime, doggedly pursuing those who pocket substantial profits from vacation rental properties without paying the required 5% tourist development tax, commonly known as bed tax, that must be charged for all accommodations rented for fewer than six months.
Bed tax money promotes tourism and funds local construction, improvement and beach renourishment projects. The county tax office collected more than $80 million in bed tax revenue in 2023.
Hotels, guest houses, RV parks, campgrounds and vacation rental companies all pay bed tax.
Individual homeowners who rent out their place pay the bed tax — or they’re supposed to. But many property owners either don’t understand the local tax laws, or simply choose to ignore them. Neither is acceptable to Monroe County Tax Collector Sam Steele or to Sellers, his sole auditor.
Since the dawn of VRBO, Airbnb and other vacation rental websites, some property owners have been trying to beat the system, fly under the radar – in short, break the law.
That’s where Sellers comes in – a certified fraud examiner armed with a new software program called RentalScape that in less than a year has enabled the tax office to identify tax cheats and collect more than $400,000 in unpaid bed tax, interest and penalties.
“If you’re advertising a place on the internet, this software makes it very difficult to get away with not paying the taxes you owe,” Sellers said on May 14.
While tax cheats despise the software tool, those who follow the laws and pay what they owe applaud RentalScape — and Sellers — for working to level the playing field.
Sellers and Steele have introduced the software to Keys cities, which can use it to identify and shut down illegal rentals of properties that aren’t licensed for transient, or short-term, rentals of less than a month.
But the licensing issues aren’t Sellers’ responsibility — taxes are.
RentalScape cross-references and mines information from roughly 80 different online platforms, including VRBO and Airbnb, finding ads, listings and reviews for properties that may or may not be paying their bed tax.
If a property owner fails to comply and pay what’s owed, the tax office can and does file a tax warrant, or lien, against the property, which can’t be sold until the lien is paid.
“We can also freeze their bank accounts if they remain non-compliant,” Sellers said. “We’ve had some real success stories on the enforcement side of things in the past year. This software provides the concrete evidence I need to make my case.”
“There’s no one I’d rather have testifying on our behalf in these cases than Sellers,” Steele said. “She testified to a grand jury for an Expedia case in which we prevailed. While I may not have a dog in the fight when it comes to illegal vacation rentals that the cities are dealing with, I have teeth when it comes to taxes owed by vacation rentals, and I’ll throw the hammer at them.”
