Avalara MyLodgeTax > Blog > State and Local News > Columbia, Missouri, Visitors Bureau reviewing new tourist tax

Columbia, Missouri, Visitors Bureau reviewing new tourist tax

  • Mar 17, 2018 | Jennifer Sokolowsky

The Columbia Convention and Visitors Bureau is seeking public feedback on the idea of charging lodging tax on short-term vacation rentals. It will report its findings to the City Council.

Currently, the city charges a 5 percent lodging tax on the costs of accommodations to guests at commercial hotels and motels. The tax does not apply to short-term rentals with fewer than 12 rooms.

According to the Visitors Bureau, there were 281 active rentals available in February on Airbnb’s website, with an average nightly rate of $114. Adding the 5 percent lodging tax to short-term rentals would increase the bureau’s budget by $44,000 annually.

The short-term rental market in Columbia has grown quickly. In February 2015, there were only three booked Airbnb properties, according to the Visitors Bureau’s research. This growth has brought up questions about whether short-term rentals are actually commercial enterprises, as well as neighborhood and parking issues.

Airbnb hosts who spoke at a Visitors Bureau hearing said that a new tax, in addition to the state sales tax that’s already being collected, could raise prices enough to scare off visitors.

Airbnb began collecting the state’s 4.2 percent sales tax on accommodations from guests on behalf of all of its short-term rental hosts in Missouri on February 1.

If Columbia levies the hotel tax on residential short-term rentals, Columbia hosts would be responsible for collecting the 5 percent lodging tax from their guests and remitting it themselves, unless Airbnb were to come to an agreement with the city to collect the tax.

Short-term rental hosts who use other platforms, such as VRBO and HomeAway, must always collect and submit lodging taxes themselves, since those platforms do not collect on behalf of their hosts.

Many Missouri short-term rental hosts use MyLodgeTax to manage their lodging tax compliance.

According to Airbnb, its approximately 6,300 Missouri hosts earned nearly $30 million in rental revenues in 2017. The number of Airbnb guests throughout the state grew by 289,000. If bookings in 2018 remain at a similar level, Airbnb estimates that Missouri will receive $1.1 million in tax revenue from Airbnb stays.

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.