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Short-term rental company sues Michigan over $18.7M tax bill

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Short-term rental company sues Michigan over .7M tax bill


A nationwide short-term rental company is suing the state of Michigan over a tax audit that found the company owes about $18.7 million in unpaid use taxes to the state.

HomeAway, a Texas-based company best known for its vacation rental platform Vrbo, received a September bill for taxes due from the Michigan Department of Treasury for unpaid use taxes and interest in 2020, 2021 and 2022, totaling $18.7 million, according to the lawsuit filed in the Michigan Court of Claims.

HomeAway maintained in its Dec. 18 filing that it is the homeowners themselves who are responsible for collecting use taxes related to the short-term rental of their homes and remitting those taxes to the state.

“All funds representing use tax collected from guests were disbursed to the hosts,” the company said in its filing.

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The state Department of Treasury and HomeAway declined to comment on pending litigation.

The tax fight comes amid a separate, but related, years-long fight in communities across the state and in the Legislature over how to best regulate and, in some cases, tax short-term rentals, which began to grow in popularity in Michigan after the 2008 housing crisis.

The Legislature has toyed with the idea of banning any local regulations over short-term rentals, putting some limits on those local regulations or establishing a statewide policy for short-term rental housing. State Rep. Mark Tisdel, R-Rochester Hills, helped introduce bills this fall that would allow communities to hold a vote on whether to tax short-term rentals locally to pay for essential services such as police or fire. The legislation has yet to receive a hearing.

In its suit filed Dec. 18 in the Michigan Court of Claims, HomeAway maintained that it was cognizant of the state’s 6% use tax and made provisions for its collection. But the ultimate remittance of that tax to the state is left to the homeowner.

When onboarding, according to the suit, a host or homeowner is given options regarding how they collect taxes. In Michigan, they could make it a percentage of the rental amount at booking or collect and remit the tax separately.

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In either case, HomeAway argued, the host was responsible for paying the use tax. If the host made it a percentage of the rental amount due at booking, the taxes charged in the booking process were sent back to the host for remittance to the state. If the host indicated he or she would collect and remit on their own, the entire process was left to the host, according to the filing.

“The host acknowledged and represented that the host would handle tax collection from guests independent from HomeAway’s online checkout process,” HomeAway wrote in its filing. “…HomeAway never received or retained any tax amounts.”

In January 2023, the Department of Treasury began an audit of the prior three years, and in June 2025, the department issued a bill for taxes due for the audit period. The department found HomeAway wasn’t responsible for paying taxes if the host indicated he or she would collect and remit on their own. But the department maintained the company was responsible for remitting taxes where the host picked the option requiring the tax to be a percentage of the rental amount due at booking, the lawsuit said.

On Sept. 19, 2025, the Department of Treasury issued an $18.7 million bill, with about $15.1 million owed in use taxes and $3.6 million owed in interest. The bill included a total of $676,246 in use tax and interest for 2020, $8.6 million for 2021 and $9.5 million for 2022.

“The department — for the first time during the audit — alleged that for all bookings for which tax was collected on behalf of and at the request of the host, HomeAway unjustly enriched itself by failing to remit the collected taxes to the department,” the filing said.

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The state treasury bills, attached to the lawsuit as exhibits, only note that the money due is for use tax and interest following an audit. There is no mention in the bills of which type of rentals HomeAway was responsible for when it came to remittance of the use tax.

HomeAway, in its lawsuit, denied that it was unjustly enriched, arguing the company didn’t keep any of the tax payments, but instead forwarded them to homeowners to remit to the state.

“It was the hosts — not HomeAway — that were responsible for remittance of use tax to the departments,” the filing said.

HomeAway also alleged the department’s audit violated the federal and state Equal Protection Clauses because it treated HomeAway differently from other similarly situated taxpayers.

“There is no precedent to support the department’s allegation, nor has the department applied this theory to similarly situated taxpayers,” the filing said.

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eleblanc@detroitnews.com



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Woman struck, fatally injured, while walking on the Lodge Freeway, state police say

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Woman struck, fatally injured, while walking on the Lodge Freeway, state police say



A pedestrian was struck and died of her injuries early Friday on the Lodge Freeway in Detroit. 

Emergency dispatchers started to get calls about 2:30 a.m. about someone who was walking along the Lodge, and then were notified that the person had been struck by a vehicle, the Michigan State Police reported. 

When troopers arrived, they found multiple cars stopped along the freeway, and people standing around a woman who was severely injured. 

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Detroit EMS pronounced the woman dead at the scene, state police said. She has not yet been identified. 

The driver who struck the woman did not stay at the scene. 

“Troopers are currently using technology that is available in the area to identify the vehicle involved,” MSP F/Lt. Mike Shaw said. 

The Lodge Freeway, also known as M-10, was closed at about 2:46 a.m. Friday between Chicago Boulevard / Hamilton Avenue and Clairmount Street for the investigation and emergency assistance, according to Michigan Department of Transportation reports. The Lodge was reported back open at 6:05 a.m.  

Michigan Department of Transportation traffic reports are at the MI Drive site. 

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State police said their investigation is continuing. Those who witnessed the crash or have other information are asked to call the MSP Metro South Post at 734-287-5000 or Crime Stoppers of Michigan at 800-SPEAK-UP. 



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List of active weather alerts as severe weather moves through Southeast Michigan

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List of active weather alerts as severe weather moves through Southeast Michigan


Severe storms bring risk of tornadoes, hail, flooding

A severe thunderstorm warning has been issued for Lenawee County. (Copyright 2026 by WDIV ClickOnDetroit – All rights reserved.)

4Warn Weather – The severe thunderstorm warnings in Monroe and Lenawee counties have expired.

A ground stoppage has also been deployed.

Click here for the latest forecast from our 4Warn Weather team.

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Here’s a list of the alerts by county.

Wayne County

  • No active weather alerts.

Oakland County

  • No active weather alerts.

Macomb County

  • No active weather alerts.

Washtenaw County

  • No active weather alerts.

Monroe County

  • Severe thunderstorm warning expired at 8 p.m.

Livingston County

  • No active weather alerts.

Lenawee County

  • Severe thunderstorm warning expired at 7:45 p.m.

Lapeer County

  • No active weather alerts.

Genesee County

  • No active weather alerts.

St. Clair County

  • No active weather alerts.

Sanilac County

  • No active weather alerts.




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Michigan football emphasizes return of discipline under new regime

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Michigan football emphasizes return of discipline under new regime


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The buzzword continued to come up in Schembechler Hall, from each one of the captains.

From Bryce Underwood to Jordan Marshall, Rod Moore to Trey Pierce − Michigan football players around for the previous regime and in the case of the latter two, the one before that too − each said Wednesday, March 25, that there’s a noticeable difference within the program under new coach Kyle Whittingham.

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For Moore, a sixth-year player who will likely become a third-time captain when the official leaders are voted on later this summer, he recognized the vibe.

“I would say it’s kind of a similarity to coach Harbaugh’s regimen,” he said. “It’s a lot more strict than the past two years, and the weight room has kind of been a night-and-day difference than the past two years. We feel a lot stronger, a lot more progress.”

The Wolverines finished winter conditioning and Whittingham graded it with an “A+.” Hope is often the dominant mode at this time of year and adding a new coaching staff to what’s generally a positive time creates little surprise that the Wolverines are raving about the new system.

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But beyond the platitudes and clichés, there are tangible examples. Take Pierce: The projected starting defensive tackle has trimmed his weight to 300 pounds while adding muscle mass to his overall frame.

“Something new that we have now is that whenever we start meetings, there’s like a loud air horn that goes off throughout the whole building,” Moore said. “The past two years, we would start the meeting at 2:30, but now we start the meeting at 2:25, even though it’s a 2:30 meeting. Just everyone being five minutes early. The coaches are holding everyone accountable in the meetings, going to class.

“Just the little things that makes a team great, not just the big, broad things that everyone sees.”

There was an implication from everyone, though nothing said explicitly, that the past two seasons featured little enforcement. Most players would show up on time for lifts, but there were those who didn’t, with few repercussions.

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“It’s the little things,” Pierce said. “Guys being late for lifts, guys not being where they’re supposed to be, whether it’s [missing] class. Just enforcing that a little bit heavier, that type of thing. … A lot of coaches say that when you’re being recruited in front of your parents. But for [Whittingham] to say that in front of the huddle after practice and say, ‘That’s why I’m here,’ I would say, ‘OK, he cares. He gets it.’”

Throughout the offseason, some who’ve spent time inside the facility said the weightlifting sessions had notably more juice. The past two years felt like a carryover of the previous years in terms of style, but accountability and discipline wavered.

Now, with Doug Elisaia leading the strength and conditioning room, there are different philosophies.

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Practices are a bit shorter these days – two hours – but as Marshall said, “I don’t stop moving at practice, like, we’re always doing something that’s not only going to help with us competing with teams, but our conditioning.”

Marshall believes it can take the Wolverines to the next level, he said.

Just more than a week into spring ball, players are oozing confidence. Not just in their skills − the running back room is deep, the wide receiver room has as much raw talent as at any point the past decade, the offensive line returned multiple key pieces, the secondary added depth and the defensive tackles feel underrated − but in mindset.

U-M had early, demanding lifting sessions during winter conditioning, with a clear organization.

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“It introduces that factor of toughness, like we’ve been through this at 6:30 a.m., 6:15 a.m., all these days in the grind together,” Pierce said. “It improves team bonding, and puts you in the headspace of, we’ve done harder stuff than this, and nothing can break us.”

The difference between winning and losing can often be razor-thin. Will this pay off when it counts during the season?

“If I can trust you to do things maybe you don’t want to do,” Marshall said, “then I can trust you on the field when it’s the fourth quarter and we have one minute left.”

Tony Garcia is the Wolverines beat writer for the Detroit Free Press. Email him at apgarcia@freepress.com and follow him on X at @RealTonyGarcia.





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