Kent County and Airbnb Announce Tax Agreement

Kent County and Airbnb announced a tax agreement authorizing the company to collect hotel taxes on behalf of its Kent County hosts and remit the revenue directly to the County.

With the tax agreement in place, Kent County will fully benefit from people visiting the region and staying longer through home sharing. Effective August 1, Airbnb will automatically collect and remit the Kent County Lodging Excise tax (also known as the hotel/motel tax) for taxable bookings, making the process seamless and efficient for local Airbnb hosts and the County.

“We appreciate the cooperation of Airbnb in helping us achieve this agreement,” said Ken Parrish, Kent County Treasurer. “The Voluntary Collection Agreement allows Airbnb hosts to operate without having to try to calculate occupancy taxes. It also simplifies collection and audit processes; we have one solo, corporate taxpayer rather than many individual business operators. This agreement provides transparency and fairness for all of our lodging partners as well.”

“I’m pleased to see this cooperative arrangement come together, thanks to the efforts of Airbnb staff and our teams in the Treasurer’s Office, the Administrator’s Office and Corporate Counsel,” said Wayman Britt, Kent County Administrator/Controller. “Our hotel/lodging industry should be treated fair and equitably. The arrangement with Airbnb helps in covering the expense for increased tourism and promotes economic well-being for our region.”

Collecting and remitting hotel taxes can be incredibly complicated. The rules were designed for traditional hospitality providers and large hotel corporations with teams of lawyers and accountants. For this reason, Airbnb has partnered with over 370 local governments throughout the U.S. to collect and remit taxes, making the process easy for hosts to pay their fair share while contributing new revenue for local governments.

This marks Airbnb’s third tax agreement in Michigan. The company previously collaborated last year with the Michigan Treasury Department on a historic tax partnership to collect and remit the Michigan use tax on all taxable bookings throughout the state. More recently, Airbnb and Genesee County announced an agreement allowing Airbnb to collect their local occupancy tax.

About 22,000 Airbnb guests experienced Kent County in 2017, which reflected 76% year-over-year growth. Yet recent data indicates that Airbnb and its host community appear to be complementing — rather than competing with — the local hotel industry.  Grand Rapids hotels experienced record revenue in 2017, parallel to Airbnb’s growth. This indicates that Airbnb could be opening up the region to a new slice of prospective tourists by catering to travelers less able to afford hotels, those who desire to stay in neighborhoods or cities that lack hotels, and families who prefer to be together under one roof.