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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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Q&A: Jocelyn Benson on her tenure as Michigan’s secretary of state

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Q&A: Jocelyn Benson on her tenure as Michigan’s secretary of state


Lansing — Jocelyn Benson, the front runner for the Democratic Party’s nomination for governor, said she believes her work in eight years as secretary of state will help convince voters to promote her this fall.

On Sunday, during a convention in Detroit, Democrats will pick a new secretary of state nominee. And on Thursday, Benson’s campaign for governor submitted about 30,000 petition signatures to get her name on the Aug. 4 primary ballot.

Amid those key moments in the 2026 election cycle, Benson, a former law school dean, sat down Thursday afternoon for an interview with The Detroit News about her time as secretary of state.

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“I think that’s what people are looking for: A government that saves them time, saves them money and makes their life easier,” Benson contended. “I’ve done that as secretary of state, and I’ll do that as governor.”

The following interview was edited for length and clarity.

Question: You just dropped off your signatures this weekend. The Democrats are going to be gathering to nominate a new person for secretary of state. I was just looking over your campaign promises from 2017, do you feel like you hit them?

Benson: I had two goals when I came into office: wait times down and voter turnout up. And we did both, and I’m really proud of that.

When I started, we did a strategic planning session every January, and during our first strategic planning session in 2019, we filled the whiteboard on every wall in the office. And in our most recent one, the final one, we had just sort of one, just one little to-do list item left, which was really gratifying. Because we have not just increased turnout, but we’ve transformed our elections, eliminated gerrymandering, implemented the state’s first-ever citizens redistricting commission, which was no easy task, and then also implemented a number of new election procedures and options, educated voters about them and took Michigan’s elections from being ranked 31st in the country to No. 2.

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We also did that while reducing those wait times (in Secretary of State offices), transforming our customer service experience. … Wait times are consistently 20 minutes or less, which was my No. 1 campaign goal.

Q: What were some of the strategies you used to get the wait times down for people?

A: No. 1, we listened to our employees, and No. 2, we collected data about what wasn’t working. You can’t fix what you can’t measure. And No. 3, we actually went around the country and looked at what states that actually had low wait times were doing. There weren’t many, but there were a few. Indiana and Illinois, had some interesting things that they did, and we took best practices that were working in other states and replicated them here.

But that first piece was key, listening to our employees. Early on in the process, we brought everyone in, all the branch office directors. I was expecting a daylong retreat where we would be discussing ideas, and I sat down with the director of branch office services. He had a whole PowerPoint presentation that went through everything we needed to do, from filling 900 vacant positions that were just vacant and not filled, to creating internally this opportunity for people to schedule the visit ahead of time.

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We didn’t pay someone else to build that. That was built by our employees.

Q: When you ran in 2018, one of the big things you were talking about was election security. Do you feel like you’ve achieved that: improving election security? And what do you think about more people probably having faith in the results of elections then than they do now?

A: I am really proud of the fact that in this era of misinformation, we were able to protect our elections and ensure they remained secure.

While withstanding this unprecedented scrutiny and an unprecedented level of frivolous lawsuits, sham legislative hearings and falsehoods spread about our elections in the eye of the storm, we not only met the moment, but we built a better election system through it. That’s evidenced by the fact that we now have choices on how to vote in our state, we’ve modernized how you can register to vote and have increased the registration numbers we have.

Q: If one of these current candidates for secretary of state came to you and said, “I believe that the election is secure and everything is fine, but obviously there’s a lot of voters who don’t. How do we improve that?” What would you say to them?

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A: Transparency is our friend.

Q: Just continue to open the process up as much as possible?

A: Well, the facts are on our side. The process is secure. So one of the most important things we need to do first is just continue to give people the tools that they need to get their questions answered and work with folks across the aisle, like we worked with Sen. Ed McBroom in 2021 to invite them into the process as well as answer questions that they have, while also, of course, maintaining any necessary confidence or security about the information that we’re providing.

But the through line is just transparency.

Q: What do you say to some of your opponents who will say, “Yeah, you decreased wait times. But what about the campaign finance website?” It’s not functioning, as they would hope it would.

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A: Well, it’s certainly better than what we’ve had in the past. I think it’s important to remember that when I first ran for office, one of the things I heard most on the trail was actually, when are you going to get rid of MERTS (the former campaign finance disclosure system)?

Q: But that’s from people who are on the back end of it?

A: Right. Yeah. So I didn’t want to leave office without taking on that behemoth, knowing that it wasn’t going to be a smooth process, but it’s a necessary one if we were actually going to have a more transparent system, which I would argue also is something that the next secretary of state really needs to lean into more: getting money out of politics. I’ll be an ally for that as governor.

But when it comes to MITN and that process, one, what it really underscores is that I’m not afraid to take on big behemoths that others, frankly, past secretaries of state, refused to do, because it was too hard. And it does invite criticism. Whenever you try to transform a massive system that’s broken, yes, there are going to be hiccups along the way.

Q: Do you think voters are interested in that message: “I’ve improved these systems. I’m in government. I’ve succeeded in government. I can make it work.” Or are they looking for someone to just change everything?

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A: People see a broken system that needs fixing, and they know I have transformed and fixed a system that every single one of our residents has interacted with. The other day, I was picking up food for my son and husband, and walking out with bags of food, and this gentleman in a pickup truck pulled up next to me in the parking lot and said, “Excuse me, are you the secretary of state?”

I was like, “I am.” And he said, “You know, I’m not political or anything. But I just was driving down this road the other day and realized when I passed the secretary of state’s office that it’s been years since I’ve had to go in there. Thank you for everything you’ve done to make that possible for me.” And I said, “Yeah, now imagine if all of government worked that well.”

Q: Do you think all three of the Democratic candidates running for secretary of state would be a good secretary of state? I know you’re not endorsing.

A: I’m committed to working with whoever comes through the convention and making sure they’re prepared to build on what we’ve done and achieve even more success.

cmauger@detroitnews.com

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Before-and-after images show severity of Black Lake flooding

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Before-and-after images show severity of Black Lake flooding


Before-and-after images of homes on Black Lake near Onaway provide perspectives on how the community was affected by April flooding.

Snowmelt and rain have stressed dams and caused lakes to flood in northern Michigan.

The Cheboygan County Sheriff’s Office shared on social media photos and videos that the agency captured of Cheboygan County floods on Friday, April 17 from both the ground and air.

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Deputies “observed a level of destruction that simply cannot be understood from ground level,” the sheriff’s office said in the post.

Google Maps images taken from two locations on Black Lake in 2024, compared with the Friday images, show how the floodwater has changed the landscape.

On North Black River Road and Taylor Road, the water has overflowed to North Black River Road.

In the 400 block of South Black River Road, water has also flooded homes and lakeside property.

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“Black Lake, Black River, Cheboygan River, Burt Lake, Mullet Lake, the Sturgeon River − and nearly every waterway in the county have overflowed beyond their banks, swallowing docks, roads, yards, and in far too many cases, homes,” the sheriff’s office post said. “What should be familiar shorelines are now unrecognizable expanses of water.”

“Our hearts are with every family affected by this flooding,” Cheboygan County Sheriff Todd Ross said in the post. “We know many of you are facing significant damage to your homes and property, and the emotional toll that comes with it. Please know you are not alone. We are working around the clock with our partners to ensure safety, provide support, and begin the process of recovery. Stay strong, stay connected, and don’t hesitate to reach out for help, we will get through this together.”

Nearby, the UAW Black Lake Conference Center shared images on social media of floodwater threatening its Old Lodge.

The conference center is located at 2000 Maxon Road in Waverly Township.

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The Cheboygan County Road Commission and the Cheboygan County Office of Emergency Management closed the bridge at Five Mile Point Road on Saturday, April 18 due to significant road washout in the area of South Black River Road and Red Bridge Road.

The sheriff’s office had encouraged residents in parts of the area to evacuate earlier in the week and said Saturday it had completed evacuation efforts on the west side of the lake.



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Driver swerves to avoid oncoming traffic, dies after crashing into tree in Texas Twp

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Driver swerves to avoid oncoming traffic, dies after crashing into tree in Texas Twp


A 20-year-old Kalamazoo man is dead after crashing his vehicle into a tree Friday evening in Texas Township, according to Michigan State Police (MSP).

It happened on South 3rd Street and West PQ Avenue around 6:50 p.m., troopers said.

While he was driving in a no-passing zone, the Kalamazoo man swerved off the road to avoid an oncoming vehicle and subsequently crashed into the tree, according to MSP.

The 20-year-old died at the scene. A passenger was hurt, but police said their injuries were non-life threatening.

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Troopers do not believe alcohol or drugs were a factor, and the two were reportedly wearing seatbelts.

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This incident remains under investigation by MSP.



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