GRAND RAPIDS, Mich. (WOOD) — When it comes to levying Kent County’s 5 percent hotel/motel tax on Airbnb rooms, finding a place to send the bill is a challenge.
Unlike hotels and motels, most Airbnbs don’t have a sign out front.
“If you simply go to the Airbnb website, you don’t get enough information about location until you’ve paid for and booked your stay,” Kent County Treasurer Ken Parrish said.
But that problem has been solved. The home sharing company has agreed to tack on a hotel tax benefiting Kent County. Airbnb says customers will see the Kent County Lodging Excise Tax on their invoices beginning Aug. 1.
Parrish estimates the added tax could bring in between $80,000 and $100,000 in new revenue this year.
“That’s based on numbers that were provided by Airbnb that stated in 2017 there was about $1.6 million in room revenue generated in Kent County. Five percent of that equals $80,000, so we’ll probably see some growth to that,” he explained.
Parrish said the county’s voluntary collection agreement with Airbnb keeps the burden off the shoulders of hosts because the company will be in charge of calculating taxes.
Kent County Administrator/Controller Wayman Britt said the agreement will “cover the expense for increased tourism” and help level the playing field for the existing hotel and lodging industry.
Airbnb says data indicates its service appears to complement rather than compete with that industry. Airbnb says that while the number of people who booked with Kent County hosts rose 75 percent last year to about 22,000 people, Grand Rapids hotels also brought in record revenue.
The money brought in from the hotel/motel tax covers a variety of costs associated with downtown’s publicly owned attractions, including paying the mortgage on DeVos Place.
An additional 4 percent marketing assessment is charged to traditional hotels and motels to cover marking costs for Experience Grand Rapids and the Kent County Convention and Visitors Bureau. That 4 percent is not part of the deal with Airbnb.
But with 22,000 visits to area Airbnbs last year, Experience Grand Rapids’ Doug Small said it couldn’t hurt to ask.
“We’re probably going to take some baby steps with them and just see how things go and determine down the line where we go from here,” Small said.
Airbnb says it has partnered with more than 370 local governments throughout the country to collect and remit taxes. The Kent County agreement is the company’s third in the state; Airbnb has agreed to collect the Michigan use tax for the state and to a local occupancy tax in Genesee County.