Airbnb Voluntary Collection Agreements

Airbnb says it has “excellent working relationships” with many Texas cities and hopes to expand the VCA with the state to “new tax treaties with Texas municipalities to help them generate new home sharing revenue.” That changed around 2014, when Airbnb began contracting with officials in some cities to collect and provide taxes from its hosts. It calls these collection agreements volontar or VCAs. In Portland, the venue for the first convention, city agents legalized home sharing and reduced registration fees for short-term rentals around the time Airbnb agreed to add an 11.5 percent occupancy tax on each reservation. Subsequently, he negotiated similar deals in San Francisco, Chicago, Philadelphia, Washington, DC and elsewhere. The company says it has signed more than 350 such agreements across the country and more than 500 around the world and has collected more than $1 billion in taxes. In areas where Airbnb has agreements with governments to collect and transfer local taxes on behalf of hosts, Airbnb charges those taxes and withholds them from guests at the time of booking. Airbnb then transferred the taxes collected on behalf of the host to the relevant tax authority. Learn more about how Airbnb works for collecting and transferring occupancy taxes. Santa Fe will maintain a voluntary collection agreement with short-term hosting company Airbnb, even if a national hosting business group asks governments to drop those offers. M. Bucks asked government officials to begin the process of terminating existing executive agreements with Airbnb, in coordination with the state`s adoption of “general marketplace provider” legislation.

Bucks went on to say that the differences between airbnb`s tax treatment and other online businesses pose a legal risk to states and locations. However, these agreements do not require hosts to comply with other zoning, health and safety rules, and they prohibit cities from trying to collect taxes. Some also create barriers for local authorities to identify and monitor hosts that list through the site. Dan Bucks, former director of the Montana Department of Revenue and former executive director of the U.S. Multistate Tax Commission, analyzed some of the few publicly available Airbnb deals and found that most city officials were preventing the names or addresses of Airbnb hosts from being known, which prevented officials from imposing local codes. . . .