Airbnb Announces Historic Home Sharing Tax Agreement with State of Iowa

Published: Oct. 17, 2017 at 8:47 AM CDT
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Airbnb, the Midwest’s leading community-driven hospitality company, announced today the finalization of a historic tax agreement with the Iowa Department of Revenue that will allow the company to collect and remit occupancy taxes on behalf of its Iowa hosts.

With the tax agreement in place, the State will be able to fully capitalize on more people visiting Iowa and staying longer through home sharing. Effective November 1, Airbnb will automatically collect and remit Iowa hotel and motel taxes directly to the Iowa Department of Revenue, making the process seamless and easy for both hosts and the State.

• State Hotel and Motel Taxes (also known as the “state excise tax”): 5%

• County Hotel and Motel Taxes: 5-7% (depending on the county)

• Local Hotel and Motel Taxes: 2-7% (depending on the municipality)

The Iowa tax agreement accounts for a broad array of taxes, including state, county and municipal taxes. Airbnb conservatively projects that this agreement will infuse hundreds of thousands of dollars in annual revenue for the State.

“Home sharing is introducing a whole new world of travelers to the authenticity of Iowa while offering a unique and potentially lucrative economic opportunity for hundreds of Iowans,” said Laura Spanjian, policy director for Airbnb Midwest. “We are so proud to have collaborated on this deal which will unlock a brand new tax revenue stream for the State of Iowa. This is a model we hope to replicate throughout the Midwest.”

The agreement comes at a time of dynamic home sharing growth within the Hawkeye State. 45 percent of Iowa Airbnb hosts simply rent out an extra, unused room in the homes in which they live. In terms of demographics, 18% of Iowa hosts are seniors (age 60 and above) and 65% are females. Hosts in Iowa and throughout the Midwest often utilize this supplemental income to pay their mortgages, settle student debt or fund their own personal vacations.

While Airbnb has partnered with hundreds of governments throughout the world to collect and remit taxes, this marks the company’s first tax agreement within Iowa. The state joins other Midwest state and local governments with which Airbnb has collaborated on tax agreements, including the State of Kansas, State of Illinois, City of Chicago, State of Wisconsin, City of Madison and State of Michigan. Airbnb is currently engaged in proactive and productive discussions with the state revenue department in neighboring Missouri, and the company is hopeful to secure agreements to begin collecting and remitting Missouri taxes soon.

WOWT reached out to Airbnb about Nebraska and they responded by saying: "We're in proactive and productive discussions with Nebraska and hope to be collecting/remitting as soon as possible"


Overview of Airbnb in Iowa:
•         970 active hosts
•         20,000 guest arrivals to Iowa via Airbnb in 2016
•         Iowa hosts earned $3 million combined in supplemental income in 2016 through Airbnb
•         Typical Iowa host earns $3,000 in supplemental income annually through Airbnb
•         18% of Iowa Airbnb hosts are seniors (age 60 or over)