Airbnb Agrees to Collect North Dakota Sales, Tourism Taxes

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By Christopher Brown

Airbnb will begin collecting sales and tourism taxes in North Dakota April 1.

The home-sharing marketplace provider said March 16 that it has reached an agreement with the North Dakota Office of State Tax Commissioner to begin collecting and remitting state-administered taxes.

With North Dakota included, Airbnb Inc. has reached tax agreements with 41 states and the District of Columbia. States with no tax agreements include Delaware, Georgia, Hawaii, Indiana, Massachusetts, Minnesota, Montana, Nebraska, and West Virginia.

Airbnb hosts received around 6,800 guest arrivals during 2017, according to a joint statement released by Airbnb and the North Dakota Office of State Tax Commissioner. North Dakota hosts earned an average of $2,900 last year by renting out their homes through Airbnb, the statement said.

Under these agreements, Airbnb calculates the applicable state and local tax on behalf of its hosts, collects the tax as part of the normal billing process, and remits the tax to the appropriate tax authority. The agreements remove the burden of tax collection from the individual hosts and automate the process for taxing authorities, the company said on its website.

State and Local Taxes

The North Dakota agreement covers a variety of statewide and local taxes administered by the Office of State Tax Commissioner, including the statewide 5 percent sales tax; city and county sales and gross receipts taxes, which vary from 0.25 percent to 0.3 percent; city lodging taxes of between 1 percent and 2 percent; and city lodging and restaurant taxes of between 0.25 percent and 1 percent.

Five cities have a locally administered lodging tax that isn’t covered by the agreement, according to Ryan Rauschenberger, North Dakota’s tax commissioner.

Neither the company nor state officials were able to provide an estimate of tax revenue the agreement will generate.

“A formal tax agreement will help simplify the tax collection process for Airbnb hosts in North Dakota,” Rauschenberger said in the statement. “Tourism revenues play a part in the state budget, and this will ensure that the appropriate taxes are being collected in a timely and efficient fashion.”

“Airbnb helps North Dakota families earn extra money to help make ends meet and our hosts want to pay their fair share of taxes,” Marisa Moret, Airbnb public policy director, said in the statement. “We are excited to partner with the State of North Dakota to make the tax collection process easier for all parties and look forward to working together to attract even more visitors to the state.”

To contact the reporter on this story: Christopher Brown in St. Louis at ChrisBrown@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

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