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Connecticut taxes Airbnb, July 2016

 Airbnb now collects and remit Connecticut lodging taxes for hosts.

“It’s never a question of whether these sales are taxable. It’s only a question of who pays and collects the tax” – Connecticut Department of Revenue Services Commissioner Kevin Sullivan.

As of July 1, 2016, Airbnb is collecting and remit lodging taxes on behalf of its Connecticut hosts. Airbnb rentals have always been subject to Connecticut’s 15% lodging tax, but prior to July 1, hosts were responsible for collecting and remitting it.

The new tax policy is the result of an agreement between Tax Commissioner Sullivan and Airbnb, both of whom spoke of it favorably. Josh Meltzer of Airbnb said, “This agreement allows the state of Connecticut to harness the economic impact of home sharing while also making it easier for Airbnb hosts — the vast majority of whom are middle class people sharing their home — to comply with state tax laws” (Hartford Business Journal).

Commissioner Sullivan spoke of the “growing complexity of taxation in a world of newly emerging ways of doing business.” He said the department intends to “issue guidance with respect to similar businesses in the months ahead.”

In addition to Connecticut, Airbnb now collects lodging taxes in Alabama, Florida, Illinois, Louisiana, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Washington, and the District of Columbia (Massachusetts Governor Charlie Baker recently opted to not pursue taxing Airbnb). The company also collects local lodging taxes in numerous cities and counties, including Humboldt County (CA), New York City, and San Francisco. Outside of the United States, Airbnb collects lodging taxes in France and India, and in Amsterdam (Netherlands) and Lisbon (Portugal).  For a complete list of the areas where Airbnb collects and remits occupancy tax, see Airbnb.

Although a growing number of states and localities now require Airbnb and similar businesses to collect and remit lodging taxes, the majority of states and localities do not. Nonetheless, they expect all owed tax revenue to be collected and remitted in a timely manner. As a result, tax compliance in most of the country falls squarely on the shoulders of property owners.

Tax automation software takes the sting out of lodging tax compliance. Learn more.

Sales 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.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.