Genesee County to book Airbnb for future bed tax revenue
After 16 years of operating as a short-term housing option for travelers, Airbnb is voluntarily signing up to be part of the bed tax system in Genesee County, Deputy County Treasurer Kevin Andrews says.
The popular offering to people looking for anything from big city apartments to cottages by the lake is expected to add an estimated $30,000 to the county’s bottom line once the Legislature votes to approve the measure.
“Basically, this is a voluntary agreement that Airbnb is looking to enter into with the county where they will collect the bed tax on behalf of anybody who rents through their platform, and then they will remit the bed tax to us directly themselves,” Andrews said at the county’s Ways & Means meeting Wednesday. “Currently, we've been reaching out to any individuals that we can find that have been using them, their platform, and others, and having them register with us directly and pay us directly, but this would just allow Airbnb to do that on their behalf and remit the tax to us on their behalf.”
What does Airbnb stand for?
It means "air bed and breakfast," a term coined when Joe Gebbia and Brian Chesky founded it in 2007. According to real estate investing site Mashvisor, the two men were living in a San Francisco apartment when they came up with the idea to rent out a lounge room to designers visiting the city. The guests slept on air beds and were fed breakfast in the morning. And Airbnb was born.
The founders’ website lists $7 billion in total taxes being collected and remitted globally and that the typical U.S. host earned $14,000 in 2023.
Why does Airbnb want to cooperate and do this?
“To help make sure that all their customers that are using their platform are meeting the requirements of the bed tax law for Genesee County and other counties so that they're meeting those regulations and requirements,” Andrews said.
When will this take effect? Do you have any idea how many properties this would include?
“Once we have approval from the legislature, we're hoping to have the agreement in place in the next month or so,” he said. “No, I don't unfortunately, Airbnb is reluctant to provide any specific information on their individuals and their platforms. Once we start receiving payments from Airbnb, then we’ll have a clearer picture on that going forward, for sure.”
County Manager Matt Landers said that the Chamber of Commerce provided a figure of about $30,000 annually that staff estimates would be the bed tax to come from Airbnb rentals.
“So this is significant,” Landers said. “Even though we’re not getting detailed information, it turns out, if there was a spot check, Airbnb can go through the process, they can see, okay, there’s a fee. You can check on it that way.”
Prior to this agreement, it was up to each individual property owner to collect and remit the bed tax. This will now allow Airbnb to assist with the process, Andrews said.
“Property owners are still supposed to register and file a report to us, and we’ll still try to get that information from them,” he said. “And Airbnb has said that they’ll put information on their website about that process so that hopefully that will assist with getting people to register in their office for that.”
Legislators shouldn’t hold their breath for other similar companies to follow suit — such as Vrbo, as Legislator Christian Yunker asked about, Landers said. This type of information isn’t “as readily available” or provided by others as it is with Airbnb, he and Andrews said.
“I think they’re less willing to work with counties on this, but we’ll make an attempt, for sure,” Andrews said.
The Legislature is to vote on a resolution on March 27 to include Airbnb, an internet-based booking platform that processes transactions within the county, which would be liable for the occupancy tax on behalf of facilities within the county that provide lodging on an overnight basis, into the county’s local law, and enter into an agreement with Airbnb to collect and remit the occupancy tax.
