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Airbnb Announces Tax Agreement With Arkansas

2 min read

Airbnb announced Monday that it will begin to collect and remit taxes in Arkansas on behalf of the company’s hosts and guests. 

Under the agreement, the online room and vacation home rental service will collect and pay taxes to Arkansas for short-term lodging at residential properties.

Collection of the 6.5 percent Arkansas Gross Receipts Tax, the 2 percent Arkansas Tourism Tax and the local Sales & Use Tax began Wednesday. Guests will be charged the appropriate taxes, the company said.

“Our community of hosts want to pay their fair share and we want to help … Agreements like this one allow communities to rightfully benefit from the economic impact of home sharing while also making it easier for Airbnb hosts, ­the vast majority of whom are middle class people sharing their own home, to comply with local tax laws,” the company said in a news release.

Airbnb said Arkansas hosts earned $4 million in 2016 and the typical host earns $3,800 a year.

The number of guests traveling to the state using Airbnb is also growing, the company said. In 2016, there were 34,000 inbound guest arrivals in Arkansas using Airbnb, a 249 percent increase over 2015.

Montine McNulty, executive director of the Arkansas Hospitality Association, said the agreement is a step in the right direction. She said it helps level the playing field and the service gives consumers more options.

McNulty also said cities that charge an advertising and promotion tax need to get together to make sure Airbnb is also paying that, as well as complying with all other applicable regulations. 

The company said it is collecting and remitting hotel taxes on behalf of hosts and guests in more than 220 locations worldwide. 

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