Business

Soon, Airbnb will start collecting taxes in Idaho. That’s good and bad for Airbnb hosts.

From left, Julie Hergenrother, Ty Hergenrother, Robert Hergenrother and Christine Hergenrother talk in the kitchen of a North End house they rented using Airbnb as an alternative to staying in a hotel in January 2015.
From left, Julie Hergenrother, Ty Hergenrother, Robert Hergenrother and Christine Hergenrother talk in the kitchen of a North End house they rented using Airbnb as an alternative to staying in a hotel in January 2015. kgreen@idahostatesman.com

Airbnb, the web-based platform allowing people to turn their homes into short-term rental properties, will begin collecting and remitting taxes in Idaho on Dec. 1.

The company announced in a release Wednesday that users reserving a rental in Idaho would be charged taxes as part of the online transaction. Previously, hosts using Airbnb and similar websites were on the hook to collect and pay taxes on their own.

In Boise, those taxes include the state’s 6 percent sales tax, 2 percent state travel and convention tax, and 5 percent Greater Boise Auditorium District tax, adding $13 to a $100 bill.

The agreement doesn’t affect similar short-term rental sites, including VRBO (Vacation Rentals By Owner). Vacasa, a Portland-based competitor that has offices in Boise, told the Statesman last year that it collects and remits taxes.

More than 300 Boise properties are listed on Airbnb. The company now has agreements to collect and remit taxes in 200 jurisdictions across the globe.

Airbnb’s tax treatment has drawn criticism. Many Airbnb hosts say they didn’t understand their obligation to collect and remit taxes, especially before the Idaho Tax Commission issued an announcement in 2015 spelling out its policy on short-term rentals.

Todd Jankiewicz had rented out a room in his North End home since 2011. In May he told the Statesman he was surprised when the tax commission sent him a notice that he owed more than $3,000 for back taxes.

“The Tax Commission can best serve our state by requiring Airbnb, a business operating in Idaho, to collect applicable state taxes,” he said in May.

Betti Newburn, former owner of the Boise bed and breakfast Idaho Heritage Inn, said she sold her business in part because she couldn’t compete with Airbnb properties not charging taxes.

Brian Scott, president of the Idaho Bed and Breakfast Association, told the Statesman in May that the number of B&Bs in the state had fallen by nearly half due to online competitors.

“A lot of former members are converting to the short-term rentals sites,” he said. “They get more bang for their buck.”

The tax commission doesn’t have estimates for the number of short-term rentals in Idaho or the total revenue not being collected and remitted by hosts.

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