1. Why is SCCH forming a 501(c)(6) also known as a trade organization?
   
   The recent enactment of Sonoma County's new vacation rental ordinance with caps and new exclusion zones.
   
   The Windsor town council's decision to ban vacation rentals.
   
   The action by the Sonoma County Board of Supervisors to apply short term rental regulations to the coastal zone.
   
   The enactment of Santa Rosa's new vacation rental ordinance.
   
   After these and many other regulatory developments, our  volunteer founder committee  recognized it was time that the coalition needed to organize in a way that would help us gather more resources to advocate, educate, build community, and offer a broader set of resources to the entire vacation rental community of owners and affiliated businesses.
   
   In order to do this, we launched a fundraising campaign to help us register as a trade organization, and apply to receive tax-exempt status as a 501(c)(6). The committee then drafted bylaws under the advice of a lawyer in advance of registering as a trade organization.
   
   On November 4, we launched our donation effort to start the process to collect the funds necessary to form our 501(c)(6). 
   
   
2. What is a business league or trade organization and how does the IRS treat 501(c)(6) organizations?
   
   According to the Internal Revenue Code, a  501(c)(6)  is a tax-exempt organization that the IRS has designated as a business league. A business league is an association of persons having some common business interest, the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit.
   
   Trade associations and professional associations are business leagues. To be exempt, a business league's activities must be devoted to improving business conditions of one or more lines of business as distinguished from performing particular services for individual persons.
   
   In our case, the Sonoma County Coalition of Hosts is dedicated to improving the conditions for short term rental owners and hosts. Our three pronged goal is to: Build resources and provide information that we may better advocate, advance our business acumen and awareness of best practices, and last but not least build community.
   
   To accomplish these goals we believe we will need develop a broad set of resources for our vacation rental community of members and affiliated businesses.
   
   
3. Are donations to  501(c)(6) organizations tax deductible?
   
   The Internal Revenue Service (IRS) states that  501(c)(6) organizations do not have to pay federal income taxes. 501(c)(6) nonprofits must however, serve their members. Contributions to section 501(c)(6) organizations are not deductible as charitable contributions on the donor's federal income tax return.
   
   They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business.
   
   
4. May we see a copy of the draft bylaws?  
   
   Yes, any donor or potential donor may view the bylaws. These are currently in draft form in preparation for submission to our attorney. With his help we expect to submit a final copy to both the state of California and the IRS. Please email us at hello@sonomacoalitionofhosts.com for a copy. Creation and registration of our bylaws will be an essential step to formalize and help us grow the coalition. They may also be amended by a vote of the board at a future date as needed. 
   
   
5. Is there a business plan?
   
   Yes, our volunteer founder committee has drafted a first year business plan that includes a budget and major milestones.
   
   These milestones include: engage with a law firm to formulate, file our bylaws with the state of California, obtain a tax-exempt status with the IRS, and fund a paid Mailchimp subscription to reach out to all vacation rental permit holders to help us grow our membership base.
   
   
6. Are you raising money for a lawsuit?  
   
   The initial fundraising effort is to help us formulate the organization as a 501(c)(6). The coalition at present has no plans to file a lawsuit of any nature. Our initial mission is to advocate, educate, build community and resources for our members, our vacation rental community, and vacation rental affiliated businesses across Sonoma County.
   
   
7. How do you envision advocacy as a formal membership organization vs the grassroots informal route employed for several years?
   
   As a formally recognized trade organization, we will be able join forces to raise funds in a tax-exempt manner in order to effectively advocate on behalf of all Sonoma County vacation rental owners, hosts, property managers, and affiliate businesses.
   
   Through our tireless grassroots efforts we now have over 400 subscribers to our newsletter, made our voices heard with elected officials, and affected some aspects of recently enacted regulations. But as we've seen recently, we'll need to become more organized to better advocate on behalf of all our stakeholders.
   
   
8. If the grassroots was not effective in your opinion, what will people paying $150/yr yield?
   
   We believe our grassroots efforts have been effective in activating the vacation rental community and was effective at educating our elected officials and commission board members. These efforts did have an impact on many aspects of recent legislation enacted.
   
   Our current fundraising goal is to establish a minimum of 50 founding members to donate funds needed to achieve tax-exempt status, open a bank account, elect a board, fund a paid email service, raise further funds, and begin to more formally advocate as a trade organization.
   
   Membership also helps us to continue providing quality content, meetups, and other events designed to strengthen your professional hospitality practices. 
   
   
9. What impact will a paid membership have for the organization?
   
   Our existing free emailing method is insufficient for our growing needs.  To reach the broader Sonoma County community of approximately 1,900 permit holders, a paid service such as Mailchimp will allow us to stay compliant with email regulations and grow our subscriber and member base.
   
   We also need to engage with a law firm to formulate, file our bylaws with the state of California, and obtain a tax-exempt status with the IRS.
   
   Even as an all volunteer, informal non-profit organization, there is also some level of liability for our current volunteer member committee. A formal 501(c)(6) designation and budget will also allow us to project our board of directors with board insurance.
   
   
10. What is SCCH’s position on the countywide 2% Sonoma County Business Improvement Assessment (SCT-BIA)?
    
    The Sonoma County Business Improvement Assessment (SCT-BIA) has enabled the hotel segment of the hospitality industry in Sonoma County to have better control of the marketing of their businesses since its enactment.
    
    The coalition has not formally taken a position on the inclusion of vacation rentals in the Sonoma County Business Improvement Assessment.
    
    However, some members of the coalition have opposed the inclusion of smaller vacation rental operators in the assessment. They believe that Sonoma County Tourism (SCT) should build more vacation rental specific programs, improve their website to better showcase  vacation rentals and hosted rentals, and better represent the STR businesses in their organization. In this way the funds generated by a vacation rentals assessment would have the same level of impact and effectiveness for our short term rental businesses.
    
    For example, the "Book your Stay" feature from the Sonoma County Tourism website is sent exclusively to a hotel booking funnel without any mention of vacation rental properties or hosted rentals located on local agency websites, or other online travel agencies such as VRBO or Airbnb.
    
    Recently, SCT has hired a full-time representative to liaison with the local visitor center community and is considering opening their board to at-large members from the vacation rental community. Two of the Volunteer Committee members, Donna Martinez and Dan Gudino, are members of the SCT-Vacation Rental Committee to the Board. These are positive steps to reach out to more local hospitality operators and affiliate businesses.
    
    We view these developments as positive steps to ensure any future extension of the assessment of the BIA to smaller vacation rental owners will improve marketing and accountability. However, the level of participation is not yet on par with that of the hotel industry.
    
    
11.  Who are the volunteer committee members that are organizing the coalition into a 501(c)(6)?  
    
    Our volunteer founder committee members make up a diverse group of hosts and business owners across Sonoma County. Many have been working with the coalition from the start, and also serve on the boards of other Sonoma county trade organizations and in leadership capacity of regional STR coalitions. 
    
    
12. Is there a board of directors for the coalition?
    
    We are not yet an organization governed by formal bylaws, thus do not have a formal board of directors. We do have a  volunteer founder committee  that meets each week to plan, organize and share events that affect our coalition.
    
    The purpose of our recent effort to fundraise and organize  is so that we can formulate a duly elected board of directors and become a more impactful organization that serves the membership of hosts, owners and affiliate businesses across Sonoma County.
    
    
13. What happens to the funds raised if we don't get our initial founding financial goal?  
    
    At this present time, we are almost halfway to our goal of reaching the minimum needed just to file our registration with the State of California ($3,000) and operate our paid email service, Mailchimp ($600). We estimate the filing with the IRS will require another $5,000.
    
    We anticipate we can raise the $3,600 from our current 400 coalition subscribers but we will need the paid Mailchimp service to reach out to the broader group of vacation rental permit holders.
    
    In the event, we are not able to raise the full amount needed to obtain our filing with the State of California, we will of course return those proceeds to our founding members, net of processing fees paid to Donorbox and Stripe our donor and payment processors.
    
    
14. Who may join the reorganized SCCH?
    
    The Sonoma County Coalition of Hosts is committed to diversity, equity and inclusion. We believe that SCCH  plays a key role to promote safe, secure and welcoming experiences for each guest, regardless of race, ethnicity, country of origin, faith, religious beliefs, sexual orientation or gender identity. We expect the same from our members.
    
    Whether you are a short term rental owner, host, or a business owner providing a service to hosts or property managers,  we welcome you.
    
    
15. How will SCCH assure members of already established regional coalitions targeted focus to meet the specific needs of their community?
    
    We believe we need a county wide organization to match the scope and resources of the regulatory bodies that regulate unincorporated areas like the coast and many other areas that generate a large amount of occupancy revenue. We also understand the need for broad representation across all areas that incorporate both cities with their own regulatory bodies.
    
    Our history at the coalition shows we have an active leadership and membership participating in actions and events at both the county and local level.

Have additional questions? Contact us.