Santa Fe to maintain voluntary collection agreement with Airbnb

May 1, 2019

Santa Fe will stick with a voluntary collection agreement with short-term lodging rental company Airbnb, even with a national lodging trade group urging governments to drop such deals.

The American Hotel & Lodging Association used the June 2018 U.S. Supreme Court Wayfair v. South Dakota decision to recommend that governments terminate existing voluntary collections agreements, or VCAs, with Airbnb.

“Airbnb no longer qualifies — if it ever did — for privileged treatment by tax agencies as a ‘voluntary collector,’ ” former Montana Department of Revenue Director Dan Bucks wrote in a report commissioned by the lodging association and released April 15. “This treatment gives Airbnb an unfair advantage in the marketplace by creating a tax and regulatory haven for Airbnb lodging operators. Post-Wayfair, Airbnb’s ‘voluntary agreements’ are now a relic of a past legal premise that no longer exists.”

The Supreme Court’s 5-4 decision in Wayfair v. South Dakota allows states to require businesses without an in-state physical presence to collect and pay sales taxes if there are more than 200 transactions or $100,000 in sales. The lodging association believes the legal framework is now in place to tax Airbnb like every other U.S. online business.

Santa Fe has had a VCA with Airbnb since August 2016. Airbnb is the only short-term vacation rental company operating in Santa Fe that collects payments directly, said Randy Randall, executive director of Tourism Santa Fe, the city’s convention and visitors bureau.

“I just see no harm in leaving a revised VCA that provides more data to the city in place,” Randall said. “To me, having a VCA with Airbnb strengthens the relationship and better ensures collections than doing without it.”

Randall said the Supreme Court decision enables the city to modify the lodger’s tax ordinance to require other online short-term rental platforms to collect not only lodger’s tax but also gross receipts tax.