BIRMINGHAM, Ala. (WIAT) — The Birmingham City Council approved a tax agreement today between the city and Airbnb.
The tax agreement authorizes the company to collect the local lodging tax on behalf of its Birmingham hosts and remit the revenue directly to the city. The agreement passed by a vote of 5-0.
Under the new agreement, Birmingham will benefit from people visiting the region and staying longer through home sharing. Airbnb will automatically collect and remit the Birmingham Lodging Tax of 6.5 percent for taxable bookings, making the process seamless and efficient for local Airbnb hosts and the city, according to a release from Airbnb officials.
This will be effective come October 1.
Collecting and remitting hotel taxes can be incredibly complicated, Airbnb said in its release. The rules were designed for traditional hospitality and providers and large hotel corporations with teams of lawyers and accountants. For this reason, Airbnb has partnered with more than 370 local governments throughout the U.S. to collect and remit taxes, which makes the process easy for hosts to pay their fair share while contributing new revenue for local governments.
Of Airbnb’s 370 U.S. tax partnerships, this now makes the company’s sixth in Alabama. Airbnb also has agreements with Auburn, Orange Beach, Tuscaloosa, and most recently Opelika to collect and remit their respective city lodging taxes.
About 19,000 Airbnb guests have experienced Birmingham in the last year, reflecting 73 percent year-over-year growth, as stated by Airbnb. Birmingham is the second most popular city for Airbnb guests in Alabama, trailing Gulf Shores.
“Our hosts want to pay their fair share, and we want to help,” said Tom Martinelli, Southeast policy director for Airbnb. “Our Birmingham host community provides a tremendous service to the city by allowing more visitors to stay in Birmingham and spend money with local businesses. This tax agreement will only enhance the economic impact and increase revenue for the city.”
The Airbnb host community provides value to the city specifically during large events that cause local hotels to reach full capacity. For example, the largest surge of Airbnb guests to Birmingham in the history of Airbnb’s platform occurred in mid-July, in connection with Sloss Fest, according to Airbnb officials.
In the release it states, statewide data indicates that the home sharing community is complementing — rather than competing with — the Alabama hotel industry. According to a recent report from the Alabama Tourism Department, in 2017 Alabama hotels experienced growth in occupancy rates, prices and overall supply — in parallel with Airbnb growth. This suggests that Alabamians sharing their homes via Airbnb are opening up the state to a new demographic of tourists by catering to travelers who are less able to afford hotels, those who desire to stay in neighborhoods or cities that lack hotels, and families who prefer to vacation together under one roof.