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Economy & Business

Airbnb to collect state tax in Missouri after reaching agreement with state

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Open Grid Scheduler / Grid Engine | Flickr
Starting Feb.1, Airbnb will collect Missouri’s state sales tax for its hosts. The popular home-sharing company reached an agreement with the Missouri Department of Revenue to allow the company to capture the state tax for its 6,300 hosts.";

Airbnb, the popular home-sharing and rental website, announced Wednesday it will begin collecting Missouri’s 4.2 percent state sales tax for its hosts. 

The company reached an agreement with the Missouri Department of Revenue to allow Airbnb to collect and remit the state sales tax for the company’s bookings, starting Feb. 1.

Ben Breit, the Midwest spokesman for Airbnb, said before the agreement was made, the burden of figuring out the tax breakdown was left to approximately 6,300 hosts in Missouri.

“It’s just a tall order to ask that of someone who’s not a professional accountant,” Breit said. “So to be able to take that responsibility away from the host and take that upon ourselves, deliver new revenue to the state, it’s really good for everyone involved.”

Home sharing in Missouri has grown in recent years. Last year, the state’s host community brought in $28.9 million in supplemental income, and saw an increase of 289,000 guests, according to Airbnb. The company said 88,500 of those guest arrivals came from the city of St. Louis, which makes it the top home-sharing market in the state.

As a result of the tax agreement, Airbnb said its rates are expected to increase. However, if Airbnb’s bookings in the state are similar to last year, the company estimates the state of Missouri will bring in $1.1 million in tax revenue.

Some other municipalities and counties, including St. Louis and St. Louis County, are considering taxing short-term rentals. Breit said the company would need to have separate agreements with each taxing district.

“We’ve been engaged in very friendly and I’d say productive conversations with both the city and the county,” Breit said. “We’ll see where it goes, but we would love to be able to be collecting and remitting their separate taxes.”

The company has reached tax agreements in more than 300 local governments throughout the U.S., including in Illinois, but this is the first in Missouri. Breit said with the company’s unique structure, the agreements take time.

“We have a much different approach,” Breit said. “We’re the only short time rental platform that does this; that tries to partner with local government and collaborate with local government to help them collect all of the taxes that they should be getting.”

A Missouri Department of Revenue spokeswoman said she could not comment.

Follow Marissanne on Twitter: @marissanne2011

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