HomeAway steps up lodging tax collection efforts

For years, short-term vacation rental platform Airbnb has aggressively pursued agreements with local governments to collect lodging taxes on Airbnb bookings on behalf of its hosts. The online short-term rental platform now collects lodging taxes in hundreds of jurisdictions in the United States and abroad.

Airbnb rival HomeAway, however, has lagged far behind in collecting taxes on its bookings — but that’s changing. Over the past year, HomeAway has started collecting lodging taxes on behalf of its hosts in both the U.S. and internationally in an increasing number of jurisdictions. While HomeAway now collects tax in some jurisdictions because it’s required to, it has entered into voluntary agreements in others.

HomeAway started collecting lodging taxes on short-term rentals a year ago in Paris, France, and has since added several French cities to its tax-collection program. It also added Vienna, Austria, this month.

In the U.S., HomeAway started collecting lodging taxes in Washington, D.C.; Puerto Rico; and Broward County, Florida, last year. It added Idaho state; Los Angeles and Santa Monica, California; and Portland and Multnomah County, Oregon, earlier this year.

Most recently in the U.S., HomeAway began collecting lodging taxes on behalf of its HomeAway, VRBO, and VacationRentals.com hosts in Washington state and Oregon on July 1.

In Washington, HomeAway will collect the state’s combined sales tax and other transient lodging taxes, including the special hotel/motel tax, convention and trade center tax, regional transit authority tax, and tourism promotion area charges.

The Oregon Legislature passed a law earlier this year that requires all short-term rental listing platforms to collect lodging taxes on all bookings. HomeAway now collects state, city, and county transient lodging taxes (except in Clackamas County).

Earlier this spring, HomeAway also reached a settlement with the city of Portland, Oregon, to resolve a legal battle that had been brewing since 2015. HomeAway agreed to begin collecting city and county lodging taxes on behalf of its Portland customers. HomeAway is also now able to register Portland hosts for short-term rental permits via their sites. The company also agreed to turn over the names, addresses, and contact information of its Portland hosts to the city.

The settlement made Portland one of only a handful of cities, including San Francisco, where short-term rental sites have agreed to release information on hosts to authorities.

Hosts still responsible

The fact that HomeAway is collecting lodging taxes in more locations may be good news for HomeAway hosts because it can reduce their lodging tax compliance burden.

However, HomeAway hosts need to realize that they’re ultimately responsible for compliance and that HomeAway may not be taking care of all of their short-term rental lodging tax obligations.

For one thing, a short-term rental property often is located in more than one tax jurisdiction, and HomeAway may not collect for all of them. For example, while HomeAway collects a 6 percent county tourist development tax in Broward County, Florida, it does not collect the Florida state 6 percent transient rental tax, which is also due on short-term rentals in Broward County. HomeAway hosts must collect that tax from their guests themselves.

Also, short-term rental hosts in many cases are still required to register and file lodging tax returns even if HomeAway is collecting the tax for them. For example, Washington hosts are still required to register with the state Department of Revenue and file lodging tax returns reporting their rental income. Short-term rental operators may also be required to pay business taxes.

And, of course, HomeAway only collects taxes for its bookings, so if hosts are listing their properties on other platforms, such as Airbnb, those tax obligations must be taken care of separately.

In the end, HomeAway’s tax-collection efforts benefit tax jurisdictions and some hosts, but in other cases, hosts still have to do plenty of the work of lodging tax compliance themselves. For hosts looking for help in meeting all of their tax obligations, MyLodgeTax offers an automated solution to ensure that hosts get lodging tax right.