Airbnb Will Collect Vermont Rooms And Meals Tax, Under New Agreement
Airbnb has agreed to collect Vermont rooms and meals tax on behalf of people who list their property for rent through the online service.Vermont tax commissioner Mary Peterson says it's estimated the agreement will bring in about $1 million to state tax revenues. The state rooms and meals tax is 9 percent.
Peterson says payment of the tax by people who rent their property using Airbnb has been spotty.
“This is one of those emerging markets that got out in front of people,” Peterson says.
There’s a long tradition in Vermont of people renting their houses, or rooms in their homes, to skiers and other visitors, but Airbnb has made that much easier. As a result it’s become an important source of income for many people.
Peterson says the fact that owners of many rentals listed on Airbnb weren’t paying a rooms and meals tax put inns and hotels at a competitive disadvantage.
“It was very frustrating for folks that are full-time in our tourism industry because these bookings end up being competition for their rooms," says Peterson.
The rooms and meals tax is owed by owners of property rented out for more than 15 days in a year.
In addition, those individuals are required to report their income from the rentals.
In conjunction with the new agreement, which goes into effect Oct. 1, the state is offering an amnesty for those who list their properties on other rental platforms like Home Away, Craigslist and FlipKey.
Those individuals who come forward and agree to pay the rooms and meals tax in the future won’t be liable for unpaid back taxes. The registration period extends to Nov. 1.
Airbnb has entered into similar agreements with a number of other states and the District of Columbia.
Peterson says those who supplement their income using other online platforms, like Uber, must also report their income from those sources.
She says credit card companies that process payments report transactions to the Internal Revenue Service, and the tax department has access to that information.
Peterson says typically these transactions are reported to the state if the income totals $20,000, but information on transactions totaling less than that are also accessible to the state.