In a deal several years in the making, Airbnb and El Dorado County have agreed that the short-term home rental platform will collect taxes on behalf of local hosts.
The website agreed to voluntarily collect a 10 percent transient occupancy tax, also known as a hotel tax, in the county beginning Aug. 1.
El Dorado County includes the southern portion of Lake Tahoe’s California shoreline, including South Lake Tahoe, which also neighbors popular casino destination Stateline, Nev.
Airbnb has set up tax-collecting agreements in more than 400 cities and jurisdictions around the world, and although hotel taxes exist across the United States, it is difficult to monitor and enforce in vacation home rentals in the popular Lake Tahoe area, according to Sue Hennike, principal management analyst in El Dorado County’s Chief Administration Office.
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The 10 percent tax already exists in El Dorado. However, the county relies on self-reporting and homeowners must file transient occupancy taxes quarterly by mailing in a check. Since Airbnb will collect and remit taxes, the new agreement streamlines the process for both the hosts and the county.
The average El Dorado Airbnb earned $15,200 in rental income in 2017, making it a lucrative enterprise for rental-property owners. And although not all owners who rent their homes are properly permitted and registered to do so, all transactions made on Airbnb in the county will collect the tax, potentially boosting the tax revenue from vacation home rentals.
An advantage for the county of collecting the tax through Airbnb is that there is a record of the number of days rented and the amount paid, potentially boosting tax revenue from vacation home rentals, said Hennike.
The county says it is working with the popular renting platform to add permit information to the listing profile, which the county hopes will increase compliance and encourage hosts to register.
Other platforms like VRBO and Craigslist don’t facilitate tax collection for short-term rentals, but Airbnb’s popularity makes this “a step in the right direction,” said Hennike.
Neighboring Placer County, which shares the Lake Tahoe shoreline, does not have a similar agreement with Airbnb but revamped its tax-collecting and compliance effort in early 2017. Alternatively, Placer works with a private contractor to monitor online listings and identify properties that aren’t permitted for rentals, according to Chris Gray-Garcia, Acting Director of Communications and Public Affairs for Placer County.
Placer County has 4,426 transient occupancy tax certificate holders in the popular tourist destination between Donner Summit and North Lake Tahoe alone. Only 618 of those properties use platforms like Airbnb or VRBO to list their rental, according to Placer County.