Airbnb, county reach tax agreement
Airbnb is a global Internet travel community enabling people to rent out their homes and become hospitability entrepreneurs. There are 140 hosts in Northampton County who welcomed 8,800 guests to share their homes in the past year. In 2017, the typical host took in $3,900 in annual income from sharing a home for approximately three nights per month. Starting this month, Northampton County will be collecting hotel taxes from this online service.
This issue was first raised by Steve Barron in 2016, when he was the county controller. He estimated the county could be adding $100,000 annually to its coffers by imposing its hotel tax on rentals arranged online through Airbnb. His research at that time showed numerous short-term online rentals at private homes.
“This places traditional hotels and bed and breakfast establishments on a more level playing field,” argued Barron. “It is not fair to ask one entity or person to pay and not another, no matter how large or small.”
Former Executive John Brown, citing “the complexity of the issue,” never moved forward.
Barron is now the county’s director of fiscal affairs, and Brown has been succeeded in office by Lamont McClure. McClure and Barron negotiated with Airbnb, and Northampton County is now collecting hotel taxes from this online room finder.
“We’re glad Airbnb has reached this agreement with us,” McClure said. “Our hotel taxes are used to promote tourism and economic development. They provide an important stimulus to our economy.”
Nonprofit organizations and municipalities can apply for grants from the Hotel Tax fund to promote events and activities within Northampton County. The Hotel Room Rental Tax is 4 percent.
Tax revenue generated by Airbnb has produced millions in Connecticut since 2016. But some communities are concerned that these short-term rentals can turn a residential property into a commercial one, changing the intended use of the area, while others have bans on transient boarders. Airbnb also has deals with Boston, Wisconsin and California. Baltimore is negotiating with Airbnb.