Airbnb to collect ad tax

Airbnb announced Wednesday that it has reached an agreement with the Hot Springs Advertising and Promotion Commission to voluntarily collect the citywide 3-cent city advertising and promotion tax on all eligible bookings, beginning June 1.

The commission will consider approving the voluntary collection agreement at its monthly meeting on Monday.

San Francisco-based Airbnb is the world’s largest short-stay online rental company, according to The Associated Press.

“We contacted them and wanted Airbnb to collect the same tax as all the other lodging properties in the city of Hot Springs are required to collect,” Steve Arrison, CEO of Visit Hot Springs, said Wednesday. Arrison said the commission contacted Airbnb after reading in the media that it had negotiated tax agreements with other cities. He noted that the state already has an agreement with the company. “It’s a fairness issue,” he said. “It is very difficult for a tax-collecting organization to tell who is participating in Airbnb,” Arrison said. “It’s that sharing economy — it’s very difficult to pinpoint. … They are still renting a room to a visitor.”

He noted that the agreement is only for the advertising and promotion tax. “The commission is not responsible for occupancy taxes or any other taxes.”

With the tax agreement in place, the city will be able to capitalize on the growing number of people visiting Hot Springs and staying longer through home sharing, Airbnb said in a news release.

The release said guests will be charged the appropriate taxes on their bill and Airbnb will remit the revenue directly to the city. Guests will see the charge on their booking receipt.

Hosts in Hot Springs welcomed nearly 3,400 guest arrivals in 2016, representing more than 300 percent year over year growth, the release said.

“Home sharing helps families earn meaningful extra income, which helps them pay their bills and plan their own vacations,” Laura Spanjian, Airbnb Public Policy director, said in the release.

“We are very excited to step into the shoes of our Hot Springs hosts and collect this tax, ensuring the city gets this important revenue. Our community of hosts want to pay their fair share and we want to help,” Spanjian said.

Earlier this year, Airbnb began collecting applicable Arkansas state taxes on all eligible bookings, also through a voluntary collection agreement. The company is collecting taxes in more than 275 jurisdictions around the world, the release said.