Avalara MyLodgeTax > Blog > State & Local News > Airbnb starts collecting short-term rental lodging tax for hosts in several California cities, counties

Airbnb starts collecting short-term rental lodging tax for hosts in several California cities, counties

  • Sep 7, 2018 | Jennifer Sokolowsky


Airbnb has recently begun collecting lodging taxes on behalf of its short-term rental hosts in several California communities. These include Carlsbad, Corona, Cupertino, Redwood City, San Luis Obispo, Sunnyvale, El Dorado County, and San Bernardino County.

For Airbnb hosts in these areas, this means that Airbnb will automatically add applicable lodging taxes to guests’ bills, collect the tax, and remit it to the tax authority on behalf of the host.

In California, the state does not levy sales or lodging taxes on short-term rentals, but local cities and counties have the option to do so, and each area has its own rate. You can look up the current short-term rental tax rate for your city or county here.

However, even if Airbnb is collecting taxes for you in your area, you need to be aware that Airbnb may not be taking care of all your lodging tax compliance requirements.

For example, jurisdictions that regulate short-term rentals may require hosts to register for a tax license, short-term rental permit, business permit, or other kind of registration. Each community has different rules.

For example, in Carlsbad, short-term rental operators are required to get a short-term rental permit as well as a business license, while in El Dorado County, the required Vacation Home Rental Permit also serves as a business license and as registration to collect transient occupancy tax.

Airbnb does offer what’s called pass-through registration in a few areas. This means that hosts can apply for required permits, licenses, or registration directly from Airbnb’s website.

Airbnb offers pass-through registration in San Francisco, for example, which has one of the strictest short-term rental laws in the United States. However, in most places, hosts will need to manage tax or business registrations themselves.

Another general lodging tax obligation for short-term rental operators is filing tax returns. Once you start collecting lodging taxes for a jurisdiction, you’re required to file regular lodging tax returns — and this is required in many places even if you didn’t have any rental income for the reporting period. Airbnb does not do this for you, even if it collects tax from your guests and pays it to the tax authority.

It’s important to understand that when Airbnb collects lodging taxes in a particular jurisdiction, it generally does not file lodging tax returns on behalf of individual hosts. Rather, Airbnb pays a lump sum to the jurisdiction. In the vast majority of jurisdictions, Airbnb does not share identifying information on hosts when it submits tax revenues. That means it’s most often up to hosts themselves to report how much lodging tax they’ve collected and remitted (or that Airbnb has remitted for them).

Many jurisdictions require hosts to file regular lodging tax returns even if Airbnb (or other platforms, such as VRBO or HomeAway) collects taxes for them, but the requirements vary from place to place.

In Los Angeles, for example, the city imposes a 14 percent transient occupancy tax on the listing price of short-term rentals. Airbnb collects and remits this for hosts. However, “hosts are still required to file monthly returns to the Office of Finance, and should take a deduction for tax collected and remitted by Airbnb (and any other applicable platform)."

However, in Cupertino and Sunnyvale, hosts who list their short-term rentals only through Airbnb are not required to file regular lodging tax returns.

Hosts who use other platforms, such as HomeAway or VRBO, also need to be aware of whether their platform is collecting short-term rental taxes on their behalf. While HomeAway and VRBO collect taxes in far fewer locations than Airbnb, the list of places where they do collect is growing.

In California, HomeAway and VRBO collect short-term rental taxes on behalf of their hosts in Los Angeles and Santa Monica. Like Airbnb, other platforms generally do not help hosts with registration or filing requirements.

While the fact that Airbnb is collecting taxes for hosts in more locations is generally good news for hosts, it’s important to be aware of your full lodging tax obligations. It’s up to you to make sure you’re complying with tax rules.

But, hosts can get help. MyLodgeTax offers short-term rental operators a management solution for tax registration, charging the correct rate, and filing lodging taxes. Even in jurisdictions where Airbnb collects lodging taxes, MyLodgeTax can help hosts be certain they’re in compliance with local short-term rental lodging tax rules.

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.