AirBnB has reached an agreement with the state Department of Revenue Services to collect hotel occupancy taxes from its customers.
Kevin B. Sullivan, commissioner of the state Department of Revenue Services, said the total annual revenue impact is modest for Connecticut but the action could serve as a model for similar companies doing business in the state. “It recognizes the growing complexity of taxation in a world of newly emerging ways of doing business. DRS plans to issue guidance with respect to similar businesses in the months ahead,” the commissioner said.
According to AirBnB, Connecticut joins a growing number of states – including Florida, North Carolina, Alabama, South Carolina, Oregon and more than 150 other municipalities globally – where Airbnb is voluntarily collecting and remitting taxes on behalf of hosts and guests.
The move by the company is seen as a means for its providers to fulfill their hotel occupancy tax obligation, according to a DRS spokesperson, by AirBnB collecting and remitting the funds directly to the state. Previously, the individual property owners would have been responsible for dealing directly with the state.
An AirBnB spokesperson said between June 1, 2015 and June 1, 2016, 54,000 visitors stayed in Connecticut via Airbnb, with the typical trip lasting 3.4 nights. Currently there are more than 1,800 active hosts in Connecticut who earned $3.5 million sharing their space over the past year.
In May, Sullivan told the Hartford Business Journal he was in negotiation to collect and remit the state’s 15 percent lodging tax from Connecticut customers, a levy that currently brings in about $100 million annually from hotels and other brick-and-mortar lodging businesses in the state.
The negotiations, Sullivan said, were part of a broader effort by him and other state officials to collect money they feel Connecticut is owed from online companies that sell to Nutmeg State residents and businesses. It’s also a way, Sullivan said, to level the playing field for Connecticut-based businesses that already collect sales, hotel and other taxes.
“This agreement allows the state of Connecticut to harness the economic impact of home sharing while also making it easier for Airbnb hosts — the vast majority of whom are middle class people sharing their own home — to comply with state tax laws,” said Josh Meltzer, AirBnB’s regional director of public policy.
