LEXINGTON, Ky. (Jan. 18, 2018) — Airbnb and the City of Lexington today announced the finalization of a tax agreement that will allow the company to collect and remit taxes on behalf of its Lexington hosts.
With the tax agreement in place, the Lexington convention and visitors bureau, “VisitLEX,” and Lexington Center will benefit from visitors to Lexington and staying through home sharing. Effective Feb. 1, Airbnb will automatically collect and remit the Lexington Transient Room Tax (8.5%) for
taxable bookings, making the process seamless and easy for Airbnb hosts.
If Airbnb were to generate the same revenue in 2018 as it did in the last 12 months in Lexington, it would bring in about approximately $240,000 in room tax revenue.
“This agreement ensures that the city is taxing Airbnb in the same way it taxes local hotels,” said Bill O’Mara, the city’s commissioner of finance. “The revenue goes to VisitLEX and Lexington Center, which promote local tourism and help fuel our economy.”
Airbnb has partnered with hundreds of governments throughout the world to collect and remit taxes, help its hosts pay their fair share, and deliver new revenue to cities and states. This marks Airbnb’s second tax agreement in Kentucky. In September 2017, the company announced a statewide tax agreement with the Kentucky Department of Revenue that authorized the company to collect and remit the state sales tax on all Kentucky Airbnb bookings (including in Lexington).
“We believe this agreement will unlock significant new revenue and allow our local hosts to easily pay their fair share,” said Laura Spanjian, Kentucky policy director for Airbnb. “In 2018, we hope to collaborate with additional municipalities throughout Kentucky on similar tax agreements so that
the state can take full economic advantage of home sharing growth.”
The agreement comes at a time when over 400 residents in Lexington share their homes on the Airbnb platform. In 2017, those hosts earned $3.1 million in supplemental income while welcoming over 27,000 guest arrivals to the city.
The typical Lexington host earns about $6,600 annually via Airbnb. Hosts often utilize this supplemental income to pay their mortgages, pay student debt or save for retirement.
Home sharing has been particularly impactful to Lexington through the infusion of lodging capacity during large events that cause local hotels to sell out. This is particularly true for families attending events associated with the University of Kentucky. In fact, the two largest surges of guests to Lexington in the history of Airbnb’s platform occurred during UK’s 2017 Spring Commencement ceremony in May and Homecoming in October.
Add Comment