Airbnb brought in more than $500,000 in first quarter of Wisconsin tax deal

Company says figure surpassed expectations

Airbnb's homepage.

Last updated on July 2nd, 2019 at 09:19 am

Home sharing service Airbnb has tallied the taxes it has paid in Wisconsin in the first three months of its new agreement with the state, and the figure is higher than expected: $546,000.

In June, Airbnb announced it would begin collecting and remitting state sales, county sales and use and some local resort/exposition taxes in Wisconsin after it came to an agreement with the Department of Revenue. The tax collection started July 1.

Airbnb said the taxes paid in the first quarter of the agreement were “far exceeding expectations,” which it attributed to the quickly growing service.

“It’s easily twice what we ever would have expected,” said Ben Breit, spokesman for Airbnb Midwest. “When we discuss the tax agreements with the local governments, they say, ‘What is this going to mean for us?’ All we can do is look back. (But) our growth has doubled.”

Milwaukee guest arrivals have increased 97 percent from 2016 to 2017, measured through October, Breit said.

Under the agreement, all Wisconsin Airbnb hosts pay state sales tax and county sales and use tax. In Milwaukee, Ozaukee, Racine, Washington and Waukesha counties, hosts also will be subject to the Baseball Stadium District Tax. In the City of Milwaukee, hosts also will pay local exposition taxes. And in Rhinelander, Stockholm, Eagle River, Bayfield, Wisconsin Dells and Lake Delton, hosts will pay premier resort area taxes.

In July, August and September, 91,000 guests stayed in Wisconsin Airbnb rentals, and the residents of those homes earned $12.3 million on the rentals, up about 98 percent from the same period in 2016. That stretch is the tourist high season in Wisconsin.

In addition to Milwaukee, Airbnb has recently come to tax agreements with the local governments in Madison and Green Bay.

The peer-to-peer home rental service is becoming an increasingly popular alternative to hotels for travelers. More than 20,000 guests stayed at Airbnb rentals in Milwaukee in 2016, with residents earning $2.1 million from the renters. Wisconsin had 2,600 Airbnb hosts in 2016, which was up 73 percent from 2015, and they earned $13 million.

This year, there are 3,300 active Airbnb hosts in Wisconsin, according to Airbnb. The typical Wisconsin Airbnb host earns about $4,000 per year and lists a rental for two days per month.

“Home sharing is introducing a whole new world of travelers to the authenticity of Wisconsin while offering new economic opportunities for thousands of Wisconsin residents,” said Laura Spanjian, policy director for Airbnb Midwest. “We are so proud to have collaborated on this deal which will unlock a brand new tax revenue stream for the State of Wisconsin. This is a model we hope to replicate throughout the Midwest.”

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Molly Dill, former BizTimes Milwaukee managing editor.

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