Millions in hotel occupancy tax revenue returned to Texas from home rental service


WILLIAMSON COUNTY, Texas (KXAN) — The City of Austin now has a road map to collect tens of thousands of dollars in short-term rental taxes by watching an agreement with Airbnb unfold in other cities.

The popular home rental service reported that it collected more than $24 million in hotel occupancy taxes from its listings for the state of Texas in 2018. It will collect millions more for select cities, but not Austin yet.

Matthew Mahon bought an equestrian facility about five years ago in a rural area in western Travis County and turned it into a short-term rental property called Old Stick Ranch. He now books guests through Airbnb for two dwellings, including one that’s a converted shipping container.

“Most people come because they see it online, and they just want to come and enjoy the ranch,” Mahon explained.

For the past two years, Airbnb has collected a six percent hotel occupancy tax and given that revenue to the state of Texas. The service explained that it’s now working to reach similar tax agreements with individual cities and has so far secured two in Houston and Plano.

Mahon told KXAN that he was unaware Airbnb even did this, but supports it.

“Any kind of revenue that’s going back to the city, as long as it’s being used properly, is a good thing,” he said.

In Leander, where Mahon’s rental properties are located, a spokesman said the city does not currently have an agreement like this with any home-sharing service.

Under current policy, properties in Austin are supposed to charge customers 15% the cost of a room in hotel occupancy taxes. 9% of that is collected and paid to the City of Austin, while 6% goes to the State of Texas.

However, that responsibility rests with individual rental owners as well as Austin’s ability to track and enforce that ordinance.

Back in 2016, Airbnb made an offer to collect those taxes for Austin, but only with anonymous, aggregated reporting rather than sharing individual, detailed information on each property. Austin city leaders have so far not accepted that deal because they’re seeking a higher level of accountability.

City of Austin Controller, Diana Thomas issued this statement to KXAN:

“The City has discussed the possibility of an agreement with Airbnb and Vrbo in the past. However they were not willing or able to give us address-level information on the amounts collected. This means if we entered an agreement we’d be unable to verify that property owners were registered to operate short term rentals, or were paying the full amount of Hotel Occupancy Taxes they owed.”

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