The state of florida now has provisions to allow people to return their timeshares when hit with a job loss. This is similar to the car industries recent rollout of a similar program.
Timeshare Owners Gain Tax Protection on Timeshare Exchange Transactions
(WASHINGTON, D.C.) — Owners of timeshare properties received some valuable tax relief in Florida, thanks to the strong and successful lobbying efforts of the American Resort Development Association. According to ARDA, Florida legislators recently passed tax-related measures that ensure important protections remain in place for timeshare owners.
In addition to ensuring timeshare owners will not pay tax on timeshare exchange transactions, the bill, HB 61, codifies a common industry practice regarding the taxation of transient stays at timeshare resorts. Additionally, it allows timeshare developers to offer “Debt-Cancellation” products to purchasers.
Though no state or jurisdiction currently collects a tax on timeshare exchange, it has become an increasing concern as state and local governments seek new revenue to fill ever growing budget shortfalls. Florida becomes the third state to pass legislation specifically protecting timeshare owners from taxes on exchange, one of the major attractions for timeshare buyers in recent years.
HB 61 protects the competitive position of Florida timeshares and the ability of Florida timeshare owners to effectively use the exchange process by preventing taxes that could raise the cost and lower the desirability of exchanges into the state.
“For 40 years, ARDA has worked with federal and state government officials in support of legislation to protect consumers,” said Howard Nusbaum, ARDA president and CEO. “The value of our industry rests in the continued trust of our owners and members.”
ARDA, along with its Resort Owner’s Coalition, has advocated for state legislation guaranteeing that timeshare owners are protected from such taxes.
“Without the consistent and strong support from sponsors, Sen. Mike Haridopolos (R-Melbourne), and Rep. Steve Precourt (R-Winter Garden), HB 61 could not have been enacted,” said Jason Gamel, Vice President of State Government Affairs of ARDA. “This ARDA-backed measure clarified the existing tax status of exchange which had been questioned by some jurisdictions as they searched for revenue in a down economy.”
HB 61 also cleared the way for timeshare developers to offer “Debt Cancellation” products. Much like products previously offered by auto manufacturers, these arrangements would allow purchasers to return a timeshare to the developer if hit with the loss of a job or the occurrence of other specified events without negatively impacting the consumer’s credit score.
The legislation also delineates the tax status of transient stays at timeshare properties. The common industry practice in such cases has been to remit tax in the same manner as a traditional hotel, but a recent court decision in South Florida called into question the taxability of these transactions. HB 61 updated Florida tax statutes to clarify that transient stays are taxable codifying the long-time practice.
