DVC T &C Personal Use - Only Thread to Discuss.

[Brianstl]

Under what law?

When you rent out your points you are subject to Florida’s Transient Rental Tax because it is considered a commercial transaction.

 

[Mouseforward]

I can find some references ( mostly related to accommodation taxes articles ) that have the guideline of making 3 rentals (duration of less than 30 days) in one year qualifies you as requiring registration as a rental business. Funny thing is it references "regular and frequent renting" and uses the 3 per year standard. Makes me wonder if DVC will opt for that.

 

[Mouseforward]

When you rent out your points you are subject to Florida’s Transient Rental Tax because it is considered a commercial transaction.

Yes you are subject to TRT , no it does not define you as commercial in the tax regulation.

 

[Brianstl]

I can find some references ( mostly related to accommodation taxes articles ) that have the guideline of making 3 rentals (duration of less than 30 days) in one year qualifies you as requiring registration as a rental business. Funny thing is it references "regular and frequent renting" and uses the 3 per year standard. Makes me wonder if DVC will opt for that.

But just one rental transaction means you have to pay the sales tax.

 

[Brianstl]

Yes you are subject to TRT , no it does not define you as commercial in the tax regulation.

You might want to look up the definition of commercial transaction.

 

[Mouseforward]

You might want to look up the definition of commercial transaction.

We have - exchanging money for a good or service does not make you a commercial business there are other factors that even the IRS requires.

But just one rental transaction means you have to pay the sales tax.

Paying sales tax does not make you a business.

 

[VGCgroupie]

No spreadsheet, but how about a chart?

View attachment 978233
I'm the orange square. Based on my pre-break read of the forums, the rest of DISBoards members are blue dots.

This is the best

 

[Brianstl]

We have - exchanging money for a good or service does not make you a commercial business there are other factors that even the IRS requires.

Paying sales tax does not make you a business.

They are subject to the sales tax because renting them out is considered a commercial transaction in Florida. The new T & C doesn’t use the term “commercial business”. It uses the term “commercial purposes”. Using them in commercial transaction is using them for a commercial purpose.

 

[ehh]

Right??? No offense to people here but I really value ehh input over most others. Maybe he can just illustrate in a spreadsheet either

I truly look forward to a most logical and analytical takedown. I don’t even care which side they’re on, either I’ll learn something or feel vindicated lol

I've shared this philosophy in the past before, but one way I try to think of "progress" is to think about it in reverse:

Imagine whatever is challenging the status quo is actually the status quo and that the current status quo is the 'progress'. How much does that 'progress' make sense? Do the decisions or changes involved make things better? Is it, in fact, regressive?

I like to apply this line of thinking to technology, politics, etc. I'll apply it here.

---

Now imagine a world where DVC is huge (like 150mil points have been sold) and renting is permitted but none of the businesses that generate revenue from renting exist or have ever existed. People rent, but only to people they actually know, and only occasionally. No member has ever generated a profit from renting.

And to satiate members who can't use all their points every year to go to DVC resorts, maybe Disney has built up a trove of exchanges. You can use your points for cruises, park tickets, other travel...so many things! Maybe they even have a point forfeiture system that allows you to get a partial dues credit on next year's dues for the points you don't use this year. In essence, Disney owns and has complete control of nearly all unused points through these exchanges, except for the occasional personal rental here or there.

Also, these exchanges are quite profitable for Disney. Disney pays, on average, something like 1.2x that year's annual dues for those points and gets to turn around and effectively rent them out via cash bookings at DVC resorts for 3-4x the price they bought them at. Huge margin and really frictionless for everyone involved.

And let's say in this imagined world that Disney sticks to their business MO of "only businesses we sign partnerships with are permitted to use our name or IP, and certainly only partnership businesses are allowed to generate revenue from our business where there might be a conflict".

Considering the above imagined world as the status quo: how do you think Disney would react to an upstart individual or business trying to partner with them to facilitate rentals? Or trying to partner with Disney to buy a lot of DVC points and renting out rooms themselves?

This plucky upstart even has their advertisement campaign sketched out...they'll go on fan sites, Disney news blogs, and podcasts saying stuff like 'the same deluxe room, but less expensive!' and other sales pitches to that effect.

In Disney's mind, that plucky upstart would clearly compete with Disney's own points exchange business and with Disney's own traditional hotel booking business. And to top it off, this plucky upstart also doesn't plan to pay Disney a dime.

So what would Disney say to that partnership request? They wouldn't say, "no thank you, that would make it harder for our members to book hard-to-get rooms." They'd just say, "no."

And if they caught you just doing it without a partnership? They'd let slip the dogs of law.

 

[Mouseforward]

They are subject to the sales tax because they are considered a commercial transaction in Florida. The new T & C doesn’t use the term “commercial business”. It uses the term “commercial purposes”. Using them in commercial transaction is using them for a commercial purpose.

That fails the most basic test - So if you sell your old car privately in Florida does that make you an auto dealer commercial enterprise ? Sales tax is due on the car.

 

[Sandisw]

But just one rental transaction means you have to pay the sales tax.

This is true…but from what I have read in FL 718 related to condos, just renting your unit out does not turn you into a commercial enterprise.

That is the level of commercial activity that the DVC contract prohibits.

 

[Sandisw]

They are subject to the sales tax because renting them out is considered a commercial transaction in Florida. The new T & C doesn’t use the term “commercial business”. It uses the term “commercial purposes”. Using them in commercial transaction is using them for a commercial purpose.

It also says that conflicts in terms will be superseded by the POS terms, which defines commercial purpose as “ a pattern of rental activity that the board can reasonably determine one is a commercial enterprise or practice”.

 

[mkatsy]

Thank you because what I have found has only been they are allowed but governed by the terms of the contract.

212.02 (2) - Tax on Sales, Use, and other Transactions. “Business” means any activity engaged in by any person … blah, blah, blah … all rentals of real property. 212.02 (10)(c) - too long to type all sleeping accommodations supplied for pay to transient guests

 

[mkatsy]

We have - exchanging money for a good or service does not make you a commercial business there are other factors that even the IRS requires.

Paying sales tax does not make you a business.

The state of Florida literally uses the word “business”

 

[Brianstl]

That fails the most basic test - So if you sell your old car privately in Florida does that make you an auto dealer commercial enterprise ? Sales tax is due on the car.

The T & C says nothing about the member operating a business or enterprise. You agree you are not making the reservation for a commercial purpose. Renting out your points to anyone can legally be considered commercial purposes by Disney and is why they intentionally didn’t provide an example of commercial purposes while they did provide a description of personal use. They don’t want to limit what rentals they can consider commercial purposes.

Other timeshare companies have previously instituted similar Terms & Conditions. They normally start with a warning letter to any member they believe has rented out points. Then each additional offense has an escalating scale of time the member is not allowed to make a reservation for anyone besides for those on the deed.

 

[mkatsy]

Yes you are subject to TRT , no it does not define you as commercial in the tax regulation.

212.02 (2) Business means any activity engaged in by any person, or caused to be engaged in by him or her, with the object of private or public gain, benefit or advantage, either direct or indirect.

 

[mkatsy]

That fails the most basic test - So if you sell your old car privately in Florida does that make you an auto dealer commercial enterprise ? Sales tax is due on the car.

Noooo … there is an exclusion for tangible personal property. Go read the statute … real property = business … take it up with the state of Florida. They put their intentions in writing.

 

[Sandisw]

212.02 (2) Business means any activity engaged in by any person, or caused to be engaged in by him or her, with the object of private or public gain, benefit or advantage, either direct or indirect.

I think the context of the contract supports a different version of the word. This is related to who owes sales tax, isn’t it?

Technically if we are saying that any time you lease real property, you are a business then it would conflict with the entire chapter of FL 718 which discusses an owner renting out their condo.

It would mean that every owner in FL who rents their house is considered a business in the state of FL?

Just like personal use can me “ones own use” but in the contract is means “using the unit for a vacation purposes” by owners, guests, leasees, and exchangers.

Even DVC does not use the word business this way…and I have had enough conversations with them to feel 100% confident saying that.

ETA: but where does this discuss timeshare points based rentals? I’ll read it…thanks

 

[TCRAIG]

You have over 1500 points at many different resorts with lots of options, prefer 1bdrms even solo and has many years of going to WDW under your belt, so it’s easy to say this. I’m not trying to call you out on this, you deserve your points and should enjoy your membership to its fullest but it’s a different thing for the many newer members (and plenty of older ones I’m sure!) with 150-200 points who can only really afford the studios for one trip a year and have to fight with commercial renters. And I say this as someone with a similar level of privilege, though not quite the 1000 Point Club yet, but one can dream.

It’s also definitely not just AKV and BWV. I own neither of those so my personal experience has nothing to do with those resorts. I’ve had no problem with getting rooms at 2/5 of my home resorts in at 11mos and even at 9 or 10mos. I’m sure if people were to take a guess, they would know which ones are the problem resorts based on the fact that they’ve come up many times in many threads about availability issues. So again, not just 2 resorts. At what point does it become a problem big enough for DVC to address in your opinion?

And anyway, I doubt Disney will actually do this fix but I don’t think it’s grossly altering the product to make people call in for the first hour of every day if they really want to ensure FCFS for their stay. It’s how it used to be, but now with the benefit of online booking just a short time later. It’s not perfect and like I said, a bit of a hassle, but it would definitely help alleviate the crush of spec rentals by commercial renters.

Are you saying you want to try and get your reservation at 8am via phone and not online? How many MS operators would DVC need to hire to handle the call volume? Do you think only members who want hard to get rooms will call in while the rest would wait til 9 to use the online system? I don’t. I really believe it would be much more frustrating to be on hold on the phone for an hour just to find those who waited to book online got the room you were on hold for anyway.
For me, I’m not convinced that eliminating commercial renters will make a dent in 8am availability for hard to get rooms… I am against commercial renting based on principle.

 

[Sandisw]

The T & C says nothing about the member operating a business or enterprise. You agree you are not making the reservation for a commercial purpose. Renting out your points to anyone can legally be considered commercial purposes by Disney and is why they intentionally didn’t provide an example of commercial purposes while they did provide a description of personal use. They don’t want to limit what rentals they can consider commercial purposes.

Other timeshare companies have previously instituted similar Terms & Conditions. They normally start with a warning letter to any member they believe has rented out points. Then each additional offense has an escalating scale of time the member is not allowed to make a reservation for anyone besides for those on the deed.

See my post above…the terms of the POS supersede the T and C…which does use commercial enterprise.

DVC can not limit reservations to only those on the deed…nor would they even try…no idea about other timeshare contracts, but ours would expressly prevent that absent a vote from owners.