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* I saw this the other day and thought it was odd. Airbnb appears to be holding out for a “voluntary agreement” before it pays taxes…
A year after the Springfield City Council passed an ordinance that would tax online travel companies, the city says it hasn’t seen a dime from Airbnb. […]
About 5,000 people were hosted in Sangamon County homes through Airbnb in 2018, resulting in $449,000 in income, according to a press release sent by Airbnb last month. Only the hosts in Springfield — a majority of the stays — would be taxed. […]
Benjamin Breit, an Airbnb spokesperson, said Thursday that Airbnb believes the city’s code doesn’t capture platforms like Airbnb to collect and remit taxes on behalf of its operators. He added the company is “still more than willing” to enter into a voluntary tax agreement with city.
“Whenever the city is ready to move forward on an agreement, we look forward to collecting taxes on behalf of our Springfield hosts,” Breit wrote in an email.
Airbnb has agreements with Illinois cities like Evanston, Rockford and Oak Park to collect their portions of a lodging tax. It has had an agreement to collect the state of Illinois’ 6 percent lodging tax since 2015.
This is most definitely a thing with the company. Airbnb claims it has these sorts of agreements with over 275 state and local governments throughout the country.
* And the company boasted about these collections in a press release today, which is what reminded me of that SJ-R story above…
Airbnb, the world’s leading community-driven hospitality company, announced today the company remitted $12.7 million in tax revenue to the State of Illinois on behalf of its local hosts in 2018.
Collecting and remitting lodging taxes can be complicated and it is for this reason Airbnb has worked with hundreds of governments throughout the world to collect and remit taxes, making the process seamless and easy for hosts while contributing valuable revenue for local comptrollers and tax collectors. Illinois was one of the first local governments to partner with Airbnb, via an agreement in late 2015 authorizing the home sharing platform to collect and remit the Illinois Hotel Operators Occupation Tax.
While the state tax agreement was Airbnb’s first in Illinois, the platform has since partnered with local governments to collect and remit local occupancy taxes on behalf of hosts in Chicago, Cook County, Schaumburg, Oak Park, Rockford, Naperville and Evanston. Airbnb is the only short-term rental platform currently that collects Illinois state taxes.
posted by Rich Miller
Friday, Mar 1, 19 @ 10:11 am
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–Collecting and remitting lodging taxes can be complicated…–
I doubt very much that your hotel competitors would agree with you.
These new sharing services have to play by the same set of rules. Otherwise, they’re getting an artificial and unfair-to-competition government subsidy in the marketplace.
Comment by wordslinger Friday, Mar 1, 19 @ 10:19 am
They probably want the agreement for legal cover, since Airbnb is the not owner of the property (unlike the hotel competitor). This is just the Amazon-sales tax collection issue for lodging.
Comment by anon Friday, Mar 1, 19 @ 10:31 am
It’s not uncommon. A business decides (or discovers) it might owe some tax, but they might not. Rather than wait for an audit and risk the taxes, interest, and penalty if they’re wrong, they come forward and pay up (or start collecting from their customers, or both). The jurisdiction gets their $, the business gets certainty, the lawyers and accountants get paid. Some states even have a standard form for it.
Comment by notsosure Friday, Mar 1, 19 @ 10:38 am
Reading between the lines, it sounds as if Airbnb didn’t collect the Springfield tax after the ordinance was adopted. Now, it sounds as if they would like to enter into an agreement to collect the tax going forward along with an agreement that provides that they won’t be liable for back taxes (if they never collected the taxes from anyone they would have to eat the back taxes). The city wants their back taxes. The city either needs to begin enforcement actions if they believe they are on solid legal ground, or enter into an agreement and amend the ordinance to clarify their taxing authority if they messed up the original ordinance and it didn’t cover Airbnb.
Comment by Anonymous Friday, Mar 1, 19 @ 11:06 am
===These new sharing services have to play by the same set of rules. Otherwise, they’re getting an artificial and unfair-to-competition government subsidy in the marketplace. ====
When I first started reading this story I also thought it sounded odd. But what do the big travel sites like Expedia or Hotel.Com do when you book a local hotel thru them? My guess is that it is up to the local hotel to remit the tax. Those hotels are easy to spot and audit if needed but obviously Airbnb’s usually don’t have big signs out front advertising themselves and the cities don’t know of them.
Comment by Been There Friday, Mar 1, 19 @ 11:36 am
Maybe Mayor Edwards can swear in Sheriff Williamson to go on raidin’ parties when they get in. They think the airBnB occupants are burglars
Comment by Annonin' Friday, Mar 1, 19 @ 12:10 pm