Vt. Department of Taxes enters into collection agreement with Airbnb

On Sept. 15, the Vermont Department of Taxes announced an agreement with Airbnb to collect meals and rooms tax on payment for lodging offered by its hosts. Vermont joins other states and the District of Columbia, as well as many other cities and counties where Airbnb has agreed to collect their occupancy taxes on behalf of the hosts.
Beginning Oct. 1, Airbnb will collect and remit taxes on the behalf of their hosts. This allows for a more streamlined booking process for the guests using Airbnb, and works to level the playing field with traditional hotels by ensuring hosts on Airbnb are collecting and remitting the taxes owed. Additionally, hosts on Airbnb will not be responsible for any back taxes they have failed to collect.
“We are very pleased to announce this agreement with Airbnb,” said Commissioner Mary Peterson. “Since the launch of sites similar to Airbnb, we have been working to fit our existing rules and regulations onto new structures of business. It’s not always easy, especially when a host finds out through an audit years later that they were responsible for collecting and remitting the rooms tax. This agreement allows for voluntary compliance which is good for Vermont and all taxpayers.”
“For people across the state of Vermont, Airbnb is making it possible to make ends meet, pay the bills and stay in their homes,” said Josh Meltzer, regional director of public policy. “Thanks to the leadership of Vermont officials, our community can now contribute new tax revenue to their communities and continue to bring new revenue and visitors to hundreds of Vermont local businesses.”
“This agreement allows the state of Vermont to harness 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 state tax laws,” continued Meltzer. “We look forward to working with state officials to implement this agreement.”
In addition to the agreement with Airbnb, the Department of Taxes is offering a voluntary come-forward program for hosts on other platforms. Between now and Nov. 1, if a host comes forward to voluntarily register with the department to collect and remit meals and rooms tax going forward, they will not be liable for any back meals and rooms taxes owed.
In addition to meals and rooms tax, the department also wants to remind taxpayers that they should make sure that all rental income is included on your income tax returns.
The Department of Taxes is currently working towards reaching out to other platforms that offer short-term rental of property with hopes to enter into agreements with those platforms as well.
Taxpayers interested in registering with the Department of Taxes should contact the Business Tax Section at 802-828-2551.