Amidst reports Monday morning that Airbnb delivered more than $24 million in home sharing and short-term rental tax revenue to Texas in the second year of its state tax agreement, New Braunfels city officials are still working to track down all the city’s short term rentals for remittance of the local hotel occupancy tax, better known as the HOT tax.
City officials approved a contract with LODGINGRevs in February for “a short-term rental compliance system and automated licensing and tax remittance system,” which staff formerly had two businesses working to do.
LODGINGRevs has since identified that there are approximately 580 short-term rentals in New Braunfels (with about two to five new ones being added and identified per month), but only 485 are registered on the new site to begin remitting taxes, meaning almost 100 of these properties are not remitting the tax to the city.
“These are the properties that have been difficult to determine their exact location,” said Jared Werner, the city’s CFO. “If you’ve ever been on one of these websites, you’ll see they don’t give the exact address until you book the short-term rental, it just gives you an area, so tracking these down is proving to be more of a manual process than we thought.”
These can be locations such as someone’s renovated garage, a spot that has multiple buildings on one property, or a home with a tucked away guest house or tiny home.
“We’re working to get notices out to those properties, to alert them to the fact they’re supposed to be remitting this tax, because they may not necessarily know,” Werner said.
The collected local HOT tax goes toward three distinct purposes, according to the city’s website.
“(About) 14.3% funds arts and cultural activities provided by various organizations, 50% is provided to the Greater New Braunfels Chamber of Commerce to increase through promotion the city’s tourism and convention businesses, (and) the remaining 35.7% funds the expansion and renovation of the city’s convention/civic center currently underway,” the website states.
It will be interesting to see what the collected figures are for the months of June, July and August this year with the help of the LODGINGRevs, Werner said.
“Those are the big months we see a lot of the HOT tax collected in — about half that specific income for the city comes in during those months,” Werner said.
The city will be putting more resources such as staff and finances toward collecting these taxes in the upcoming fiscal year’s budget, Werner said.
“That would give us the ability to focus more on collecting these taxes, because again, it’s proving to be more of a manual process than we thought,” Werner said.
Monday morning, Airbnb, the leading short-term rental company, announced it had delivered more than $24 million in home sharing and short-term rental tax revenue on behalf of Texas hosts in the second year of its tax agreement with the State of Texas.
This was up from the $15.3 million collected in the first year of the agreement. The agreement, announced in April of 2017 was with the Texas Comptroller’s Office, authorizing the home sharing platform to automatically collect the 6% state HOT tax on behalf of its host community and remit the revenue direct to the state.
“This tax agreement has made it easier for our Texas host community to easily pay their fair share while delivering tens of millions in revenue to the state,” said Laura Spanjian, senior policy director for Airbnb in a statement Monday. “We thank Comptroller Hager for his leadership and look forward to replicating this model with additional counties and cities throughout Texas.”
Revenue from the Texas HOT tax contributes both to the General Revenue Fund as well as the Texas Governor’s Economic Development and Tourism office to help market Texas as a global destination for tourism.
Since the initiation of the state agreement, Airbnb has announced a tax agreement with Plano to collect the city’s hotel occupancy tax.
Last week, Airbnb and Houston announced an agreement authorizing Airbnb to begin collecting the city’s hotel tax.
Airbnb is currently engaged in conversations with additional Texas municipalities that are similarly interested in having the company collect and remit their respective city occupancy taxes on behalf of hosts.
New Braunfels is not one of these at the moment.