Services like Airbnb target of revisions to Allegheny County's hotel tax
Golfers and fans who use Airbnb to book a “lovely colonial” four-bedroom home within walking distance of the U.S. Open at Oakmont Country Club could be among the first to pay the county's hotel tax under new rules introduced Tuesday.
Allegheny County Treasurer's Office officials said they want to strengthen the county's hotel tax law to make sure short-term rental companies such as Airbnb, and the people using them, are paying the appropriate taxes.
“Not all of the folks that are renting the rooms in their houses are following the law and collecting and paying the tax to the county,” said Michael McCabe, an attorney at Goehring Rutter & Boehm, the Downtown firm that handles tax cases for the treasurer's office.
McCabe said the treasurer's office hopes the new regulations will be in place to collect taxes on places rented for the U.S. Open at Oakmont Country Club in June. Houses within walking distance of the course are listed on Airbnb for up to $3,000 a night.
Allegheny County imposes a 7 percent tax on hotel rooms. The law as-is requires people who use Airbnb and other services to pay the tax, but enforcement is difficult, McCabe said.
The hotel tax generated nearly $32 million in revenue in 2014.
County Treasurer John Weinstein submitted changes to the law to Allegheny County Council on Tuesday. Council President John DeFazio, D-Shaler, put the bill into the Budget and Finance Committee for review. The bill was co-sponsored by DeFazio and six other Democrats. The measure would require a majority of eight votes to pass council.
Weinstein's changes to the 1977 tax allow booking agents — Airbnb, HomeAway, VRBO and other internet-based companies — to collect the tax and pay it to the county.
The changes ask that the companies give the county a list of properties listed for rent and their owners.
McCabe said the treasurer's office modeled the changes on legislation passed last summer in Philadelphia before Pope Francis visited in September. The Philadelphia City Council worked with Airbnb to craft the legislation, McCabe said.
“Airbnb is working with cities across the country and around the world to help collect and remit taxes on behalf of our hosts and guests, and we are eager to work with policymakers in Pittsburgh and Allegheny County to ensure our community can pay their fair share,” Airbnb spokesman Christopher Nulty said in an email.
Nulty said Airbnb is collecting and remitting hotel taxes in more than two dozen cities in the United States and in Rhode Island, North Carolina, Oregon and Florida.
Airbnb, HomeAway and VRBO allow people to list their homes, apartments, second homes or cottages, even spare rooms, for rent. People can search the sites for rental properties. The sites often arrange booking and payment. They don't always collect the required taxes.
“You're basically operating like a mini hotel from a tax standpoint,” Rob Stephens, co-founder of MyLodgeTax, a hotel tax service that helps people determine and pay their taxes, said of people who rent out properties through the websites. “There's really no malfeasance here. They're just not aware that they trigger occupancy taxes.”
Stephens said the average listing can generate $15,000 to $30,000 a year in revenue for the owner. In Allegheny County, that means $1,050 to $2,100 a year in taxes per property.
HomeAway and VRBO, which caters to vacation rentals, list about 70 properties each in the Pittsburgh area. Airbnb lists more than 300 homes, apartments and rooms for rent in the Pittsburgh area. Rooms in apartments or houses are listed for as little as $20 a night. Entire homes and townhouses rent for thousands per night.
Airdna, a company that tracks Airbnb data, found that more than 3,200 Airbnb listings in the Pittsburgh area generated more than $530,000 in rentals between September 2014 and August 2015. The data suggest Airbnb alone could generate more than $37,000 in tax revenue for the county.
Stephens said cities nationwide are enforcing existing tax laws on homeowners who list houses, apartments and rooms on online rental services. He said large cities have been slower to take notice of the services compared to smaller resort towns.
McCabe said the changes to the county's law would make it easy for people to pay the tax and for the county to collect the tax. Seeking out individual homeowners who rent a house or a room only a few times a year is difficult, McCabe said.
The treasurer's office does not know how much revenue it has lost out on through Airbnb and other services.
McCabe said the office intends to go after homeowners who haven't paid. The office recently settled a few cases with bed-and-breakfast owners who hadn't paid the tax.
Aaron Aupperlee is a Tribune-Review staff writer. Reach him at 412-320-7986 or firstname.lastname@example.org.