MACo Executive Director Michael Sanderson testified in support of Senate Bill 93, “Hotel Rental Tax – Accommodations Intermediary – Collection Requirement,” before the Senate Budget and Taxation Committee on February 1, 2017.
This bill requires “accommodations intermediaries” – facilitators that coordinate the sale or use of accommodations between guests and hosts, like online short-term rental platforms Airbnb and VRBO – to collect and remit state sales tax and local hotel rental taxes.
From MACo testimony:
According to a recent study by the Penn State University School of Hospitality, nearly 40 percent of the revenue generated on Airbnb is attributed to users who rent multiple units, and nearly 30 percent of the total revenue generated is derived from hosts who operate rentals fulltime.
Online rental platform use represents a significant growing sector of the hospitality industry, and in the interest of fairness, it should be treated as such for taxation purposes. Counties depend on local hotel rental taxes to fund essential public services, collecting just over $110 million throughout the state annually. Applying this existing tax to online rental platform users promotes fairness and helps support education, public safety, and needed community services.
Sanderson also stressed that the bill relieved the individual “host” from the responsibility, placing that onus on the intermediary company. “It’s a host friendly bill,” he said during testimony.
Follow MACo’s advocacy efforts during the 2017 legislative session here.