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Airbnb collecting taxes on convention rentals

Airbnb collecting taxes on convention rentals
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Airbnb is collecting taxes on rentals during the political party conventions in Cleveland and Philadelphia, according to a tax analyst.

Carl Davis, research director at the Institute on Taxation and Economic Policy, said the decision is the result of recent agreements and laws, and he praised the move on the liberal Tax Justice blog

Davis said it made sense for guests renting though Airbnb to pay the same taxes as hotel guests.        

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"This is a victory for good tax policy, but most jurisdictions still lag behind," Davis wrote. "Far too many states and localities still need to update their tax systems (and regulations) to account for Airbnb and similar companies."

Ahead of this week's Republican National Convention in Cleveland, the city council passed legislation last month to apply a 3 percent transient occupancy tax to Airbnb guests. Also, Airbnb in April started collecting a 5.5 percent hotel tax from the county where Cleveland is located, according to The Plain Dealer.

Next week's Democratic National Convention is in Philadelphia, which started collecting an 8.5 percent occupancy tax on Airbnb guests in July 2015. In June, Pennsylvania reached an agreement with Airbnb for the platform to start collecting the state's 6 percent hotel-occupancy tax this month, the Philadelphia Inquirer reported.

Airbnb states on its website that it is working with governments across the world “to explore ways to help facilitate occupancy tax collection in as many locations as possible.”

Josh Meltzer, Airbnb regional director of public policy, told the Inquirer that the company’s agreement with Pennsylvania allows the state "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 own home — to comply with state tax laws."

Davis said that state and local governments should not wait until they host major events to update their tax laws to account for activity in the on-demand economy.

“With the current boom we’re seeing in the sharing economy, it’s time for lawmakers across the country to begin dealing with these issues,” he said.