Airbnb to collect 2% lodging tax for Bentonville

Hot Springs also has pact

BENTONVILLE — Airbnb will begin collecting and remitting a 2 percent lodging tax on bookings in Bentonville starting Friday, making the city one of only two in the state to have such an agreement with the shortterm rental website.

Airbnb will include the tax on guest bills and remit that money to the city beginning Sept. 1, according to a news release. Hotels and motels in the city already collect the tax.

Visit Bentonville uses that tax money, along with a 1 percent tax on restaurants and prepared food, to support events and amenities that aim to draw tourism dollars into the city.

“By voluntarily collecting these taxes, Airbnb makes it easier for our hosts to comply with local tax laws and lightens the administrative burden for the government,” Laura Spanjian, Airbnb public policy manager, said in the news release. “[It’s] a win-win for everyone.”

The company, founded in 2008, allows property owners to monetize their extra space by renting it out short-term. Airbnb operates in 65,000 cities and 191 countries, according to its website.

Airbnb has guidelines on taxes for its hosts on its website and says it expects “all hosts to familiarize themselves with and follow their local laws and regulations.” However, officials say it’s tough to enforce such laws locally, and many hosts likely are not paying the required taxes.

A Bentonville Airbnb host is supposed to pay the 6.5 percent Arkansas sales tax, 2 percent state tourism tax, 1 percent Benton County tax, 2 percent city sales tax and 2 percent hotel tax, for a total tax of 13.5 percent.

Collecting and remitting hotel and tourist taxes throughout the world was part of Airbnb’s Community Compact, which outlined a “series of commitments to ensure home sharing strengthens communities,” Laura Rillos, a company spokesman, said in an email.

The company’s first such tax agreement was with Portland, Ore., in 2014.

It began collecting and remitting the Arkansas sales and tourism taxes as well as local sales taxes Feb. 1, and a 3 percent advertising and promotions tax in Hot Springs on June 1, Rillos said.

“Visit Bentonville reached out to us this spring, and we are proud to partner with them,” Rillos said.

Bentonville joins more than 310 jurisdictions globally where Airbnb has collected and remitted more than $300 million in hotel and tourist taxes, according to the news release.

Hot Springs is the only other city in Arkansas that currently has an agreement with Airbnb similar to Bentonville’s, according to the company’s website.

In central Arkansas, neither Little Rock nor North Little Rock currently collect a lodging tax on Airbnb listings, but both cities have been in contact with the company to reach an agreement.

“We have been in communications for some time now to strike a deal,” Little Rock Convention and Visi-

tors Bureau spokesman John Mayner said.

Bob Major, executive director of the North Little Rock Convention and Visitors Bureau, said the City Council approved an ordinance adding Airbnbs to the list of places the city could tax — which also includes army parks, campgrounds and bed-andbreakfasts — but the city is still working on an arrangement.

Fayetteville doesn’t currently collect tax money from Airbnb sites in that city, but officials have been in contact with Bentonville officials about how to do it, said Paul Becker, Fayetteville chief financial officer.

“We’re pursuing it,” he said. “This would be a major help in the enforcement of those taxes.”

Visit Rogers and the Advertising and Promotions Commission in Springdale may look at the option in the future, but it’s not a top priority right now, officials from both entities said.

Kalene Griffith, Visit Bentonville president and chief executive officer, said some, but not all, Airbnb owners in Bentonville have been paying the hotel tax in the city already. Those who do are promoted on Visit Bentonville’s website, she said.

Having Airbnb collect the taxes provides an opportunity to promote other hosts as well as collect additional money

to help the city continue to become a tourist destination, Griffith said.

Griffith said she’s not sure how much tax has gone uncollected in the past but will have a good idea after the September taxes are collected.

There are about 70 Airbnb listings in Bentonville, Rillos said.

Daniel Hintz, an Airbnb host in Bentonville, said it will be a convenience for Airbnb to take over the collection of taxes.

Hintz has operated a one-bedroom apartment Airbnb rental for about a year and paid the lodging tax.

“That’s just part of knowing your business — just understanding what the rules and regulations are,” he said.

The tax goes to a worthy cause — Visit Bentonville’s work in making the city a destination — which in turn helps not only promote Hintz’s Airbnb, but also invests in other tourist and quality of life amenities that increase the value of hospitality options, Hintz said.

“The more cool stuff they [Visit Bentonville] do, the more people who want to come to Bentonville,” he said. “The more people who want to come to Bentonville, the more they want to stay in great places like [the 21c Museum Hotel] or a great Airbnb. It’s about choice. And that’s really what this is all about.”

Information for this article was provided by Rachel Herzog of the Arkansas Democrat-Gazette.