Home » MBJ FEATURE » Airbnb starts collecting 7 percent hotel tax in Mississippi

Airbnb starts collecting 7 percent hotel tax in Mississippi


Airbnb announced on Wednesday that effective Oct. 1 it began collecting from its member hosts a 7 percent hotel tax and will remit it the state of Mississippi.

The announcement came two days after the state Department of Revenue revised its regulation on such accommodations to clarify with language from state law 41-49-3 in which “hotel” is defined as anyone offering one or more rooms . . . “to transient guests and [whose property is] known to the trade as such.”

Mississippi joins more than 300 municipalities globally in neighboring Southern states where Airbnb is voluntarily collecting and remitting occupancy taxes, the company said in the release.

State Tax Collector Herb Frierson last spring pushed to mandate that San Francisco-basd Airbnb and similar operators such as VRBO, or Vacation Rentals by Owner, collect and remit the tax.

He drew opposition from those who saw the effort as being unfair to small “mom-and-pop” competitors to hotels and questioned whether the agency had the authority to do so.

Crystal Davis, spokeswoman for Airbnb, said in an interview that the company is simply sending a public notice as it does whenever it reaches an agreement with any governmental entity, whether state or city.

Frierson said in an email on Thursday that “DOR is actively engaged in securing as many voluntary collection agreements as possible,” and we have many taxpayers who voluntarily agree to collect and remit sales taxes for this State.   In this case, Airbnb has stepped forward and agreed to collect and remit sales taxes on behalf of its member hosts in Mississippi.   If they did not, then each Mississippi host would be required to individually collect and report sales tax.

Airbnb agreements with some governmental entities have loopholes, as evidenced by news reports.

The Louisville Courier-Journal reported on Sept. 20 that homeowners in the city who are in the Airbnb network took in $6.2 million in 2016. But because “few homeowners have registered their short-term rental units since new rules took effect in 2016” the city is receiving only “a fraction” of what it should be getting, the paper reported.

The company entered an agreement with the state of Kentucky that effective Oct. 1 a 6 percent sales tax and a 1 percent “transient room tax” will be added to the stays, the Courier-Journal reported.

Texas Public Radio reported on Sept.29 that San Antonio may be undercollecting its hotel tax owed by short-term renters by $100,000 a month.

The Airbnb issued the release Wednesday with a Jackson dateline said that in 2016 there were “1,200 active hosts” in Mississippi, who took in $3,5 million.

At that level, the state should get $245,000 in its coffers with 100 percent collection.

Also the 25,000 Airbnb guests in Mississippi last year was a 132 percent increase over 2015, the release said.

And “the typical host in Mississippi earns $3,200 annually from sharing their home 13 nights per year,” the release states.

“Being able to collect and remit taxes on behalf of our hosts and guests will help Airbnb’s community pay their fair share . . . and will create an additional stream of revenue from the state’s tourism industry,” Will Burns, public policy director for Airbnb in Mississippi, said in the release.


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