Airbnb to start collecting taxes in Wisconsin

Will automatically tax hosts on home sharing income

Airbnb's homepage.

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

Home sharing service Airbnb will begin collecting and remitting occupancy taxes in Wisconsin, the company announced today.

Airbnb’s homepage

The state Department of Revenue struck a deal with Airbnb that will require its hosts, who rent out rooms or their whole homes, to pay taxes on that income. Beginning July 1, Airbnb will automatically collect those taxes from hosts and distribute them to the state.

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, 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.

Under the new agreement, all Wisconsin hosts will 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.

Airbnb previously struck a deal with the City of Madison for its own transient occupancy taxes, which the company began collecting May 1. The company now has tax agreements with 250 jurisdictions nationwide.

The company expects this agreement to generate “hundreds of thousands of dollars” each year for the state. And it doesn’t expect the taxes will deter hosts, as that has not happened in other states with the agreements.

”Ultimately, the hosts set their own prices,” said Ben Breit, spokesperson for Airbnb Midwest, who described the negotiations as friendly. “I think everyone understands that this is the right thing to do. They appreciate that we take this responsibility on their behalf. It makes it very simple for them and they can just worry about being good hosts.”

“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.”

A representative for the Wisconsin Department of Revenue could not immediately be reached.

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Molly Dill, former BizTimes Milwaukee managing editor.

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