Airbnb: Delivers $2.5 million in tax revenue to Wisconsin in first year of agreement
Ben Breit, Airbnb Midwest Public Affairs
Phone: (847) 274-5456
MADISON, WI -- Airbnb, the world’s leading community driven hospitality company, announced today that it delivered over $2.5 million in home sharing tax revenue on behalf of its Wisconsin hosts in the first year of its tax agreement with the State of Wisconsin, far exceeding even the most generous projections.
In June 2017, Airbnb announced a tax agreement with the Wisconsin Department of Revenue, authorizing the home sharing platform to automatically collect the 5% Wisconsin state sales tax on behalf of its host community and remit the revenue directly to the state. That agreement took effect July 1, 2017, infusing a new revenue stream for the state to fully capitalize on more people visiting Wisconsin and staying longer through home sharing.
In addition to the state sales tax which applies to all bookings across the state, the agreement authorizes Airbnb to collect a handful of local taxes that are administered by the Wisconsin Department of Revenue. They include:
Collecting and remitting hotel taxes can be incredibly complicated. The rules were designed for traditional hospitality providers and large hotel corporations with teams of lawyers and accountants. For this reason, Airbnb has partnered with over 370 local governments throughout the U.S. to collect and remit taxes, making the process easy for hosts to pay their fair share while contributing new revenue for local governments. In addition to state tax agreement, Airbnb has agreements in place with the cities of Madison, Green Bay and Racine to collect their respective taxes.
At the time of the June 2017 partnership, the Wisconsin Department of Revenue announced that if guest arrivals and host revenue were to remain consistent with 2016 numbers, it would mean $700,000 in sales tax revenue. The $2.5 million in revenue significantly outpaced those projections. This is largely due to continued growth among the local Airbnb community in Wisconsin. Throughout the duration of the tax agreement, over 260,000 guests have experienced Wisconsin through Airbnb, representing 78% year-over-year growth. In fact, this past weekend (August 3-5) represented the largest surge of guests to Wisconsin in the history of the Airbnb platform.
Over 4,900 Wisconsin residents now share their homes via Airbnb. Local hosts often play a major role in providing expanded lodging capacity during major events that cause hotels to reach peak occupancy. These include Green Bay during Packer games, Madison during large events associated with UW, and Milwaukee during festival season.
Statewide data indicates that Airbnb and its host community appear to be complementing -- rather than competing with -- the Wisconsin hotel industry. Reports from Wisconsin Hotel & Lodging Association demonstrate that Wisconsin hotel occupancy rates, daily prices and revenue have grown steadily, in parallel to Airbnb’s growth. This suggests that Airbnb is opening up the state to a new slice of prospective tourists by catering to travelers less able to afford hotels, those who desire to stay in neighborhoods or cities that lack hotels, and families who prefer to be together under one roof.