Basalt officials have reached an agreement with the short-term rental behemoth Airbnb that, based on 2016 numbers, could net the municipality an additional $20,000 annually in new tax revenue.
Basalt rental hosts earned an estimated $500,000 from 2,700 guests staying in the town, and beginning Wednesday, “Airbnb will begin collecting and remitting the [town’s] 4 percent lodging tax on behalf of its hosts and guests on eligible bookings,” said Airbnb spokesperson Jasmine Mora. “Guests will be charged the appropriate tax on their Airbnb bill, and the company will then remit to the [town] the taxes collected.”
According to Mora, the typical Basalt hosts earned about $7,100 in 2016.
Airbnb had not paid that 4 percent lodging tax rate to the town the same way owners of other short-term rental operations, such as hotels, have had to pay.
The agreement was initiated at the behest of Basalt.
“Basalt contacted Airbnb,” said assistant town manager Judi Tippetts. “I have not collected anything yet. We have collected from a few real estate companies in Basalt [that are] managing properties. I do not know how much has gone uncollected.”
Tippetts said Basalt’s finance department is working on locating and contacting other short-term rental operations that have fallen through the lodging-tax collection cracks, such as Vacation Rentals by Owner.
Airbnb had previously reached tax-collection agreements with 11 other jurisdictions in Colorado, including the state government. The communities that have joined with Airbnb to collect local taxes are: Snowmass Village, Carbondale, Steamboat Springs, Pagosa Springs, Loveland, Golden, Durango, Colorado Springs and Boulder.
“With this new agreement, Basalt joins over 310 jurisdictions globally, where Airbnb has collected and remitted over $300 million in hotel and tourist taxes,” Mora said.
San Francisco roommates Joe Gebbia and Brian Chesky in 2007 founded Airbnb to help make their monthly rent in one of the most expensive cities in the world. They began by renting out an air mattress inflated in their apartment living room.
The company, with 3,100 employees, now boasts 3 million lodging listings in 65,000 cities and 191 countries. It counts 150 million users. Since it remains a privately held company, its revenue figures are not available.
The company is not without controversy.
In San Francisco, protesters accuse Airbnb of contributing to rising rental rates, as landlords keep properties off the longer-term rental market and instead get higher rental rates for short-term housing via Airbnb. In 2017, San Francisco passed a law requiring Airbnb hosts to register with the city before they can rent units; units can’t be rented for over 90 days a year.
Other cities throughout the world have passed similar ordinances.
As well, there have been many accusations from around the world centered on tax avoidance, both on the part of Airbnb and its affiliated hosts.
Lest you mistakenly think, in a town with an annual budget in the millions, that an extra 20 grand in additional revenue gained by the collection of taxes from the local Airbnb industry is small taters, understand that that extra cash could almost make up for how much Basalt’s legal fees have been over budget so far in 2017. That amount also would pay for the amount requested by the town to help pay for a new roof at Crown Mountain Park. Or it would pay three times over the amount requested for the Basalt Community Garden in 2018.
Source: Aspen Daily News