Avalara MyLodgeTax > Blog > Lodging Taxes > Airbnb makes deal with Davis, California, to collect lodging taxes on listings

Airbnb makes deal with Davis, California, to collect lodging taxes on listings

  • Dec 7, 2017 | MyLodgeTax

Davis, California

Airbnb has made a deal with the City of Davis to automatically collect lodging taxes on its Davis bookings and pass the revenues on to the city, beginning Nov. 1.

The agreement allows the city to collect the same 12 percent transient occupancy tax from vacation rentals that it does from hotels and other lodging establishments — at least for Airbnb listings.

The Airbnb agreement should be a welcome development for many short-term vacation rental owners in Davis, as Airbnb takes on the task of collecting and remitting city lodging taxes for them.

However, for those Airbnb hosts who were not previously collecting taxes, the automatic addition of the tax will raise their booking prices by 12 percent.

Hosts should also keep in mind that they’re still responsible for taking care of lodging taxes that aren’t handled by Airbnb. That includes registering with the city and collecting and remitting all taxes on rental revenues booked through other platforms, such as VRBO, that don’t collect lodging taxes on behalf of their hosts.

Airbnb hosts in Davis earn an average of $8,500 a year for short-term vacation rentals, according to Airbnb. Short-term vacation rentals in Davis are particularly popular during UC Davis events such as graduation and move-in weekend.

The lodging taxes collected from Airbnb bookings go to fund city services, although some on the City Council would like to see those revenues go toward affordable housing.

Davis voters approved a 2 percent increase to the transient occupancy tax in June 2016, raising it from 10 percent to 12 percent. The city estimated the increase would generate an additional $240,000 per year in tax revenue. That amount should rise even more now that Airbnb is collecting the tax for its listings.

Airbnb has agreements to collect lodging taxes from its listings with more than 300 communities globally — including 30 in California — and has been very active in pursuing more agreements. In the U.S., the company has recently made deals with cities including Basalt, CO, Pacific Grove, CA, and Berkeley, CA.

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.
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At Avalara MyLodgeTax, we provide the fastest and easiest way for short-term and vacation rental property owners to comply with their lodging or occupancy tax requirements. We manage your lodging taxes so you don't have to and guarantee your compliance — period. If we make a mistake, we'll fix it at no cost to you. No contracts, no obligation, no worries. Never worry about lodging taxes again. Contact us at MyLodgeTax@Avalara.com.