Avalara MyLodgeTax > Blog > State & Local News > Airbnb removes pass-through registration for hosts in New Orleans

Airbnb removes pass-through registration for hosts in New Orleans

  • Jun 19, 2018 | Jennifer Sokolowsky

New Orleans

Until recently, new Airbnb hosts in New Orleans had the option to automatically apply for a city short-term rental license through Airbnb’s site as soon as they listed their property. Once the license was approved, the license number would automatically be posted on the listing.

Now Airbnb has discontinued this feature, known as “pass-through” registration, in New Orleans.

The change was made a couple of weeks after the New Orleans City Council placed a nine-month moratorium on new and renewed short-term licenses for whole-home rentals in the Business District and many historic neighborhoods, including Bywater, Faubourg Marigny, Mid-City, Treme, and much of Uptown.

Without the pass-through registration system, Airbnb hosts must now apply for licenses directly with the city. While hosts still have the option of posting license numbers manually on their listings, Airbnb no longer automatically posts those for them.

The move makes it harder for the city to enforce short-term rental requirements. When registration numbers were posted across the board on Airbnb, the city could match license numbers with names and addresses in the registry and more easily spot rentals that were operating illegally.

"We've been working in partnership with the city of New Orleans for the past two years, implementing a package of enforcement tools, including data sharing and a pass-through registration system, tailored to the city's new short-term rental rules passed in December 2016," Airbnb spokeswoman Laura Rillos said in a statement. "The city changed the rules in May 2018, and these unilateral changes are incompatible with one of the enforcement tools, the registration system previously available through Airbnb."

Part of New Orleans’ current short-term rental rules includes an obligation for hosts to collect lodging taxes from guests and pass them on to tax authorities. Airbnb is the only short-term rental platform that collects New Orleans lodging taxes.

New Orleans hosts must collect a 4 percent Hotel-Motel Sales Tax, a Hotel Occupancy Privilege Tax of 50 cents per night, and a Neighborhood Housing Improvement Fund Fee of $1 per night. Hosts must also collect a 5 percent state sales tax on bookings.

Airbnb collects both the state and city taxes for hosts listing on its platform. Short-term rental operators in New Orleans who list their properties with other platforms, such as VRBO or HomeAway, must collect both state and city taxes themselves and remit them separately to the correct jurisdiction. MyLodgeTax can help short-term rental hosts in New Orleans navigate the process of collecting and remitting all lodging taxes.

Short-term rentals are big business in New Orleans. A recent study from the University of New Orleans concluded that visitors using short-term rentals in New Orleans spent nearly $900 million related to their stays last year, $150 million of that on lodging alone.

The report also found that short-term rentals generated $263.1 million additional earnings for New Orleans residents in 2017, up from $56.1 million five years ago.

The city has collected about $6 million in taxes and fees from Airbnb since the short-term rental law took effect in April 2017. 

While Airbnb has the option to rescind pass-through registration in New Orleans, other cities require Airbnb and other platforms to reject listings that do n’t meet legal requirements. In San Francisco, the number of listings on short-term rental sites plummeted when the new law went into effect and the platforms pulled unregistered listings off their sites.

More recently, a U.S. District Court judge dismissed a suit brought by Airbnb and HomeAway against the city of Santa Monica, California, over short-term rental rules. The judge’s ruling means that short-term rental platforms will be required to verify that hosts listing properties on their sites are registered with the city.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.