Airbnb To Start Paying Hotel Tax To State of Connecticut

The Connecticut Department of Revenue Services has reached a deal with Airbnb to start collecting and remitting taxes.

Connecticut is the first state in the tri-state region to do so, but joins a growing list of states and cities internationally with similar agreements.

From Wooster Square, to East Rock, to the area around Yale University’s campus, there are more than 300 listings for New Haven on the popular online marketplace for short term home sharing rentals.

“The more visitors we get to the state the better,” Connecticut Lodging Association Director of Marketing Barbara Malmberg said, “we got to make sure that we have everyone playing at the same level.”

The state’s tax agreement with Airbnb helps achieve that goal, Malmberg said.

“We applaud the efforts of the Department of Revenue Services,” she said, “this was a big undertaking.”

Connecticut’s hotel occupancy tax rate of 15 percent is the highest of any state.

“This is a relative very modest impact in terms of additional state revenue,” DRS Director Kevin Sullivan told NBC Connecticut on the phone. “But it’s the principle and it’s the fairness.”

Over the past year, Airbnb says more than 1,800 active hosts in the state earned $3.5 million.

“For people across the state of Connecticut, Airbnb is making it possible to make ends meet, pay the bills and stay in their homes,” Airbnb regional public policy director Josh Meltzer said. "Thanks to the leadership of Connecticut officials, our community can now contribute new tax revenue to their communities and continue to bring new revenue and visitors to hundreds of Connecticut local businesses.”

The new tax plan with Airbnb kicks in on July 1.

“There are more and more examples of folks who do exactly the same business through an online connection as somebody else does down on the street without an online connection,” Sullivan said.

Sullivan added he hopes the deal with Airbnb can serve as a model for taxing other businesses based online.

“We as a department have a particular obligation to be sure that the state is collecting all of the taxes that are due,” Sullivan said.

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