City collection of short-term rental tax set

ROGERS — Visit Rogers and Rogers Advertising and Promotion Commission will begin collecting an expanded city lodging tax from shortterm rentals Jan. 1, according to a news release.

The City Council voted in June to expand the 3% city lodging tax to include rentals such as Airbnb and VRBO.

The city has about 100 short-term rental properties, said J.R. Shaw, executive director of Visit Rogers and vice president of the Rogers-Lowell Area Chamber of Commerce. He estimated the changes could generate $100,000 in revenue in the first year, which the commission will use to market Rogers as a travel destination.

Adding short-term rentals to the definition of hotels and motels didn’t create a new tax, but instead clarified it and updated the ordinance to match changes in the state statute, said Raymond Burns, chamber president and CEO. The city ordinance already included cabins, bed and breakfasts, campgrounds and condominiums.

Just a handful of shortterm rental property owners were submitting the lodging tax before the changes were made, Burns said. Some have been calling for more information since the city ordinance passed, and it’s estimated the updates will boost the advertising and promotion commission’s budget by 10%, he said.

Visit Rogers and the commission have contracted with GovOS ShortTerm Rentals, an online software company, to collect the tax from hotels and short-term rentals, Shaw said. It will also help identify and communicate with property owners, he said.

Property owners had to mail or deliver the tax in person before the software system was implemented, but the software will eliminate paperwork for all lodging establishments, including the city’s 22 hotels, Shaw said.

Short-term rental owners must also have their property inspected by the Risk Reduction Department and obtain a business license to operate in Rogers, said Peter Masonis, city public relations manager. The properties can be located only in zoning districts that allow residential dwellings, he said.

City ordinance allows the commission to use its tax dollars to promote Rogers, said commission Chairman Mark Kruger. The commission coordinates with the chamber of commerce, which provides staffing and implementation, he said.

“Our main mission is heads in beds,” he said. “When we get that, we will stimulate the economy in so many ways the money being spent as tax comes back several times over.”

The chamber has a fulltime sales staff who works to bring in people for hotel nights and groups for conventions, Burns said. It also has a website and social media accounts to attract leisure visitors, he said.

Short-term rentals will benefit the most from the marketing efforts the commission provides for leisure travel, Burns said. All lodging providers will be listed on the Visit Rogers website, Shaw said.

“We want to help them be successful,” he said. “We know many travelers and visitors look to stay in those vacation homes.”

Ashley Pledger, who is considering renting her downtown property, said the 3% tax won’t impact her. If anything, it will improve her earning potential because the money is going directly to promote tourism in the area, she said.

“They are going to need some place to stay,” she said.

Taxing short-term rentals is part of a local, statewide and national trend, Kruger said.

State statute 26-75-602, dealing with authorized gross tax receipts, passed during this year’s legislative session. It added the word “house” to the definition of lodging places, Burns said.

Springdale has a 2% lodging tax that applies to short-term rentals and hotels, said Bill Rogers, Springdale Chamber of Commerce president and CEO. The tax has applied to short-term rentals for at least three years, he said.

Money collected from the tax is used to draw more visitors to the city and increase hotel occupancy, he said.

Bentonville has a 2% lodging tax for advertising and promotion, and the city does collect the tax from short-term rentals, said city spokeswoman Debbie Griffin. The city doesn’t have any specific requirements for short-term rentals, but property maintenance codes and noise ordinances do apply, she said.

Fayetteville has a 2% hotel, motel and restaurant tax that includes short-term rentals, according to Jonathan Curth, development services director. The city also requires short-term rental owners to get a business license and inspection, he said.

Half of the tax collected goes to the city parks, and the other half goes to the advertising and promotion fund, he said.

“Our main mission is heads in beds. When we get that, we will stimulate the economy in so many ways the money being spent as tax comes back several times over.” — Rogers Advertising and Promotion Commission Chairman Mark Kruger