A new claim that Airbnb`s voluntary tax collection agreements with local governments are “unprecedented and vital,” the vacation rental platform announced Monday. The report released on behalf of AHLA calls on state and community policymakers to reject Airbnb`s future search for voluntary collection agreements (VCAs) and to view Wayfair`s decision as a way to terminate the VCA`s current agreements and bring Airbnb within the framework of current industry tax standards and regulations. In areas where Airbnb has agreements with governments to collect and transfer local taxes on behalf of hosts, Airbnb charges those taxes and withholds them from guests at the time of booking. Airbnb then transferred the taxes collected on behalf of the host to the relevant tax authority. Learn more about how Airbnb works for collecting and transferring occupancy taxes. National and local governments across the country have entered into VCAs to facilitate the collection and transfer of temporary taxes on the occupancy of Airbnb users and hosts. These agreements largely allow Airbnb to keep information about individual hosts, which some critics have said prevents governments from knowing where short-term rentals are or whether Airbnb has paid the correct amount of tax. The American Hotel and Lodging Association (AHLA) this week released a report by former Montana Revenue Department director Dan Bucks, which claims that last year`s Decision by supreme court Wayfair vs. South Dakota eliminates the need for the state and localities to enter into “voluntary collection agreements” (VCAs) with Airbnb and offers the legal framework and incentive to tax Airbnb like other online businesses. Through its voluntary tax treaties, Airbnb covers administrative and collection costs and sends the money directly to the appropriate government.
It also casts a shadow over traditional hotels that have argued that Airbnb`s tax treaties are not constitutionally relevant in the wake of the U.S. Supreme Court`s decision in South Dakota. Wayfair, where online shopping platforms must levy a turnover tax, even if they do not have a physical presence in a state. The report states that there is a gap in coverage between the platform legislation and our agreements and that Airbnb`s local agreements “remain important and critical.” WASHINGTON, DC — A new report released today on National Tax Day highlights why the Supreme Court`s Wayfair vs. South Dakota decision eliminates the need for states and municipalities to enter into “voluntary tax agreements” with Airbnb. The report, released by Dan Bucks, former director of the Montana Revenue Department and former executive director of the Multistate Tax Commission, says last year`s decision provides the legal framework and incentive to tax Airbnb like any other U.S. online activity. “Airbnb`s secret tax treaties are hurting communities across America by reducing their schools, infrastructure and other public services,” Rogers said. “Airbnb`s special treatment must stop.” The report, written by University of Connecticut law professor Richard Pomp, discusses the many tax treaties Airbnb negotiates with local governments.
“Airbnb no longer qualifies – if it has already done so – for preferential treatment by tax authorities as a `voluntary collector,`” Bucks said in the report. This treatment gives Airbnb an unfair advantage in the marketplace by creating a tax and regulatory oasis for airbnb operators. .