Short-term rental giant Airbnb will assist SLO in making sure residents using the company's app to rent out rooms and homes to visitors are paying their fair share.
Airbnb announced that it had entered into an agreement with the city of SLO and began voluntarily collecting and remitting transient occupancy taxes (TOT) from its hosts on Aug. 1. According to the company, such agreements streamline the tax collection process for rental hosts and alleviate some of the administrative burden on cities and counties tasked with collecting what can be a valuable source of revenue.
- Image Courtesy Of Airbnb
"It's been a priority for Airbnb as a company to engage and work with local jurisdictions on all things related to short-term rentals," said Matt Middlebrook, Airbnb's public policy lead for the state of California.
Under the agreement, Airbnb automates the tax collection process, calculating and collecting the taxes from guests at the time of booking, according to the company's website. SLO will join more than 400 other jurisdictions around the world that entered similar agreements with Airbnb, including 45 in California, which Middlebrook said hosted more than 7 million Airbnb guests last year.
SLO requires short-tem rentals hosts to get a permit through the city and pay a transient occupancy tax. According to City Manager Derek Johnson, there are currently 241 active short-term rental listings within the city. Of those, Johnson said that 57 were permitted homestays. In June, the city began to request TOT payment from all short-term rentals, regardless of whether they were permitted or not.
"We are working on a plan to pursue collection of the unpermitted non-paying rentals and working on bringing them into compliance," Johnson wrote in an email to New Times. "Regardless of being permitted or not, TOT must be paid."
Johnson said that the average permitted homestay in the city paid $1,800 in TOT taxes last year. Based on that estimate, unpermitted homestays in the city not paying those taxes could mean SLO is losing out on between $279,000 to $531,000 of TOT revenue annually.
Airbnb will collect taxes from its hosts with both permitted and unpermitted rentals, possibly helping the city recover some of that revenue.
SLO is the second local government to partner with Airbnb to collect TOT payments.
In August of last year, SLO County also entered into a similar partnership to collect taxes from short-term rentals in the unincorporated areas of the county. An Airbnb spokesperson told New Times that the company collected and remitted an estimated $1 million in taxes for the county between October 2017 and June 30 of this year. Δ