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City Possibly Losing $100,000 Per Month In Hotel Taxes On Short-Term Rentals

Courtesy AirDNA
Locations of Airbnb Rentals according to AirDNA

Since May, Airbnb has started collecting taxes for their Texas hosts, people who own extra properties, or are using their homes into rentals for 30 days or less. The company and its hosts made $76 million dollars this summer, from May 1 to August 31, according to data from the Texas State Comptroller. This means nearly $4.6 million in Hotel Occupancy Taxes, or HOT Taxes, in four months.

San Antonio city staff don't know how many short term rentals, or STRs, there are. The websiteAirDNA scrapes the data from Airbnb and sells it to investors, banks like UBS, and tourism planners like in Los Angeles. 

AirDNA says more than 1700 properties are active STRs in San Antonio.

City officials estimate that 200 properties -- or less than 12 percent of the number identified by AirDNA -- are paying their HOT Tax.

According to the Comptroller's data, the city of San Antonio should have collected more than $487,000. The city didn't disclose how much they had received, but -- based on AirDNA data -- it is possible the city is missing $100,000 each month. 

The city didn't disclose how much they had received, but – based on AirDNA data - it is possible the city is missing $100,000 each month.

Rob Killen is a San Antonio land use lawyer. He sits on a city task force that is trying to craft an ordinance for STRs, and he says he isn't surprised some hosts are paying.

"They don't understand they have the same kind of obligation as a hotel or motel operator has to pay the tax that goes to promoting San Antonio and building up our tourism industry."

Mike Shannon is director of Development Services for the City of San Antonio. He says he thinks getting an ordinance passed with a registry will help.

"Where, if you're a short-term rental, you have to register with us, just let us do our safety inspection, but certainly part of that will be proof that you paid your HOT tax," Shannon says.

At a recent task force meeting, several members who are STR hosts expressed concern that they were paying the tax and so many weren't. Multiple hosts said it cut into their competitiveness to charge more. 

Multiple task force members who didn't want to be named speculated that some weren't paying because they thought they wouldn't have to pay the back taxes, once they were compelled to register. They think that Airbnb will negotiate a better deal for them like it did at the state level.

According to documents TPR obtained from an open records request, The State of Texas Comptrollers' office agreed to waive any state back taxes in exchange for Airbnb collecting and paying them going forward from May 1. 

In a statement, Airbnb's Southwest Public Policy Director Laura Spanjian wrote, "Airbnb is commited to helping our community pay its fair share of of hotel and tourist taxes."

Spanjian points to Airbnb's collection of taxes for 300 local governments as proof of their commitment.

Homeaway and VRBO, two other popular short term rental platforms, largely don't collect taxes on rentals. Homeaway collects in two cities. Washington D.C. and Paris, France. 

Paul Flahive can be reached at Paul@tpr.org