Airbnb to collect taxes on home-sharing

It estimates state will get $700,000

Short-term home rental company Airbnb said Thursday it has struck an agreement with Wisconsin to collect and pay state-administered taxes on lodging.

The deal addresses one criticism of the home-sharing service — that many participants gain an unfair competitive advantage by not collecting the sometimes-hefty taxes people staying in conventional hotel rooms must pay.

But the agreement doesn’t cover room taxes levied by more than 300 Wisconsin communities on hotel stays. Those taxes are administrated not by the state but by the cities, towns and villages themselves.

The deal with the Wisconsin Department of Revenue will take effect July 1, Airbnb said. A department spokeswoman confirmed that the agency had entered into the agreement, but referred questions on details to Airbnb.

The company said it will collect the state sales tax and any county sales and use taxes connected to home stays.

Airbnb said it also will collect special local taxes, including the Miller Park stadium district tax levied in Milwaukee, Waukesha, Ozaukee, Washington and Racine counties; Wisconsin Center District taxes in Milwaukee County; and special resort area taxes in Wisconsin Dells, Lake Delton, Eagle River, Rhinelander, Bayfield and Stockholm.

If the agreement had been in effect last year, it would have generated $700,000 in tax payments to the Department of Revenue, Airbnb estimated.

It appears that Airbnb, under the agreement, would collect taxes on home rentals in the city of Milwaukee and forward them to the state for use by the Wisconsin Center District. The district operates Milwaukee’s downtown convention center, the UW-Milwaukee Panther Arena and the Miller High Life Theatre.

Under a separate agreement reached this year,

Airbnb also will collect the local room tax for home rentals in Madison. That agreement took effect May 1.

Together, Milwaukee and Madison accounted for a little more than one third of the $13 million earned by Airbnb hosts in Wisconsin last year, the company said.

Trisha Pugal, president and CEO of the Wisconsin Hotel & Lodging Association, raised concerns about the still-unknown details of the state-Airbnb pact.

In some other states, similar agreements have been kept confidential, she said. In some places, she said, states do not have access to Airbnb transaction information that hotels must provide.

“It’s great that the state will have additional revenue, sales tax revenue, through this. … It’s just the conditions of the agreement would be of interest,” Pugal said.

Hotel owners nationally have watched Airbnb nervously, criticized its practices and, The New York Times reported in April, launched a plan to curb its growth.

Wisconsin has shared in that growth. Airbnb said its 3,300 active hosts booked 105,000 guest arrivals here last year, up 164% from 2015.

Milwaukee accounted for 20,000 guest arrivals last year, and Madison for 19,000, the company said.

The Wisconsin agreement and a similar pact in Michigan bring to 21 the number of states where Airbnb has struck taxcollection deals. Including local municipalities, the company has tax-collection agreements with more than 250 jurisdictions in the United States, a spokesman said.