FY 2007 Proposed Budget - Arlingtonva
Subject: COR – Airbnb
FY 2017 Proposed Budget Budget Work Session Follow-up April 14, 2016 The following information is provided in response to a request made by Mr. Vihstadt at the work session on April 7, 2016, regarding the impact of enforcing licenses and tax compliance on Airbnb type rentals.
Enforcing licenses and tax compliance on Airbnb type rentals is challenging, as Airbnb has not been willing to share identifying information of renters with the Commissioner of Revenue (COR); it is even difficult to estimate the number of renters. While the Commissioner’s office has worked to educate renters about the requirements to pay Transient Occupancy Tax (TOT), register for business tax licenses, and pay BPOL; their ability to find renters is limited to those who voluntarily come forward or who have been reported by neighbors or others. There have been fewer than ten such cases to date. The impact on BPOL revenue is expected to be small. If all Airbnb renters were to comply with business license filing, their license fee would most likely be either the $30 or $50 flat license fee due by businesses with either less than $50,000 in gross receipts or between $50,000 and $100,000. The impact on Transient Occupancy Tax would be slightly higher, however; with less than ten known renters the overall revenue to the County is very small. It should be noted that there are indications that there are many more properties in the County which are registered as Airbnb however, the Commissioner of Revenue and other County agencies do not know the location of these properties and as noted above, Airbnb is not willing to share this information.
L:\DMFBUD\Bud17\Work Sessions\Follow-up which has gone to the Board\D-7 COR - Airbnb.docx
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FY 2017 Proposed Budget Budget Work Session Follow-up April 14, 2016 The following information is provided in response to a request made by Mr. Vihstadt at the work session on April 7, 2016, regarding the impact of enforcing licenses and tax compliance on Airbnb type rentals.
Enforcing licenses and tax compliance on Airbnb type rentals is challenging, as Airbnb has not been willing to share identifying information of renters with the Commissioner of Revenue (COR); it is even difficult to estimate the number of renters. While the Commissioner’s office has worked to educate renters about the requirements to pay Transient Occupancy Tax (TOT), register for business tax licenses, and pay BPOL; their ability to find renters is limited to those who voluntarily come forward or who have been reported by neighbors or others. There have been fewer than ten such cases to date. The impact on BPOL revenue is expected to be small. If all Airbnb renters were to comply with business license filing, their license fee would most likely be either the $30 or $50 flat license fee due by businesses with either less than $50,000 in gross receipts or between $50,000 and $100,000. The impact on Transient Occupancy Tax would be slightly higher, however; with less than ten known renters the overall revenue to the County is very small. It should be noted that there are indications that there are many more properties in the County which are registered as Airbnb however, the Commissioner of Revenue and other County agencies do not know the location of these properties and as noted above, Airbnb is not willing to share this information.
L:\DMFBUD\Bud17\Work Sessions\Follow-up which has gone to the Board\D-7 COR - Airbnb.docx
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