Carter County seeks to contract with Airbnb for hotel/motel tax

Published 10:34 am Friday, December 6, 2019

Carter County is looking to contract with Airbnb, in order to collect the hotel/motel tax along with other hotels in the county.

Finance Director Brad Burke said the move is similar to areas like Chattanooga and other places in the state, which have been looking to clarify whether Airbnbs count towards the tax. County Attorney Josh Hardin said a few months ago that the tax could apply to the hosting service should the county pursue it.

“It is normally applied to hotel rooms automatically,” Burke said.

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Airbnb is a rapidly expanding marketplace where anyone can create an account and rent out their home or hotel room (the latter depending on the conditions of the original lease) to those looking to travel at more affordable costs. Airbnb announced in March of this year they hosted more than six million listings from all over the world.

Currently, Airbnb hosts have to arrange the tax separately with a form from the county clerk’s office, which calculates the tax they owe based on the rent of the room minus a small percentage due to operating costs. Roughly speaking, this tax comes to a little less than 5 percent of the monthly rent. Renters must pay this tax monthly to the host, who then turns the tax over to the county.

Burke said roughly 98 percent of the hotel/motel tax money received goes to the Chamber of Commerce, while the remaining 2 percent goes into the general fund.

“Last year, the chamber collected $143,978.07,” he said.

Airbnb does not automatically collect this tax in all jurisdictions, though recent partnerships with local governments have worked to include this tax, so renters now pay the tax automatically just like with other hotels they may utilize.

This provides an added convenience for renters, who would not need to go through the hassle of paying the tax after already paying several hundred dollars for the room.

The decision to send the tax money to the chamber, Burke said, came from the county commission a few years ago, and they can decide to send that money elsewhere should they desire.

As of now, work is still being done before any official partnership is reached.