Airbnb to start collecting Pennsylvania hotel tax
Online lodging service Airbnb will collect Pennsylvania’s 6 percent hotel tax beginning July 1 from users who book stays in the state.
The negotiated agreement between Airbnb and the state — the first among Mid-Atlantic states — also calls for Airbnb to collect and give the state the additional 1 percent hotel tax levied by Allegheny County and Philadelphia.
However, other counties that charge a hotel tax in addition to the 6 percent apparently will have to rely on their county treasurers to get what they’re owed.
“The agreement with Airbnb places Pennsylvania at the forefront of states responding to the sharing economy and will help to level the playing field across the lodging industry,” Gov. Tom Wolf said in a news release.
Pennsylvania’s hotel occupancy tax applies to anyone renting out property — from hotel rooms to entire homes — for less than 30 days.
Airbnb’s Pittsburgh area — Allegheny, Beaver, Butler, Washington and Westmoreland counties — has 1,160 active listings. From 2014 to 2015, the number of listings jumped 130 percent and continues to grow, the company said.
The tax on Airbnb users, the state says, will generate about $1 million per year that will be routed to the state general fund.
Christopher Nulty, an Airbnb spokesman, said the company will collect the tax from hosts who rent their properties and will issue a check each month to the state. The company, he explained, is cooperating with the state to provide as much information as it needs to collect taxes.
“To be regulated is to be recognized, which is why we establish these kind of agreements to collect taxes,” Nulty said. “For the more than 8,000 hosts we have in Pennsylvania, this process just got a lot easier,” he said.
John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association, was more cautious about the impact of the agreement.
“The decision is similar to many other deals they’ve negotiated — it’s an honor system,” Longstreet said. There are no stipulations on how Airbnb should collect the taxes, he said, which could lead to money owed to the state never getting collected.
Hotels in Pennsylvania are required to file detailed reports to prove they’re paying an appropriate amount of taxes, Longstreet noted.
Counties other than Allegheny and Philadelphia that have additional hotel taxes aren’t covered by the state’s agreement, leaving them to rely on their county treasurers to try to collect on Airbnb users.
Butler County, for example, has an additional 3 percent hotel tax, but county officials are unclear how tax collection will work in regard to Airbnb. The Butler County Tourism Board, which relies on hotel tax revenues, has sent a letter to the state asking for clarification.
“We need a definition from them because it’s unclear for everyone,” said Jack Cohen from the tourist board.
Revenue from Allegheny County’s total 7 percent hotel tax has steadily increased over the past decade. In 2006, it was about $20 million. In 2015, Allegheny County received $34 million from the tax.
The tax is a combination of an original 5 percent tax and a 2 percent increase. The money is split among the Visit Pittsburgh tourism promotion group, Monroeville to fund the Expo Mart, debt service payments for the David L. Lawrence Convention Center, PNC Park and Heinz Field and other purposes.
Airbnb collects taxes in more than 150 municipalities worldwide, the company says. Other states that have made deals with Airbnb include Alabama, Connecticut, Florida, North Carolina, Oregon and South Carolina.
Max Siegelbaum is a Tribune-Review staff writer. Reach him at [email protected] or 412-388-5803.