Airbnb has become an international phenomenon since 2008, and the sensation is no exception in Athens. Recently, there has been conversation surrounding new taxes and regulations for these updated bed and breakfasts.
Councilwoman Chris Fahl, D-4th Ward, has brought up the point in recent City Council meetings. Fahl said the tax is already in effect but is not trying to single out Airbnbs.
“Short-term rentals covers all the various varieties of things we call bed and breakfasts,” Fahl said in an email. “Like all businesses, taxes have to be taken into account in payment. The owner of the short-term rental does not pay the tax, the visitor does. The transient guest tax is the same for all types of hotel and other short-term rental.”
The regulation passed detailed that these Airbnbs would charge residents the 3% lodging tax. It was cleared in November 2018, and Fahl said the discussion is about how to use the money.
“(The tax has been brought up recently) probably because of the discussion of the Bailey’s project and short-term rental regulations being discussed,” Fahl said in an email.
The Bailey’s Trail project is an estimated $10 million project to create 88 miles of trails in Athens, according to a previous Post report. The project is to be paid through grants, fundraising, bonds and possibly the tax. The amount of revenue that would be brought in is unknown.
“(It) depends,” Fahl said in an email. “Our transient guest tax has increased over the past years. Lots of hard work on the part of the visitor bureau. Every bit helps!”
While the tax is already being paid and affecting prices, some owners feel they are paying enough already.
“Since ours is only a private room, it is already hard to compete with cheap hotels just on price as we have our base price, plus a cleaning fee, plus a lot of Airbnb fees that they charge us and the guest,” Airbnb owner Richard, who declined from using his last name, said. “On top of that, any income is taxed as self employment income at a higher than normal income rate. We are also paying taxes on our mortgage.”
He believes Athens is ahead of other areas in Ohio in terms of where tax is being applied automatically, not reliant of reporting from the host. Previous to this, only a dozen out of the hundred Airbnbs in Athens were paying county taxes, according to Athens County Commissioner Chris Chmiel.
“As I mentioned, we are already paying an occupancy tax—collected from guest but affects the total cost—on each booking,” Richard said. “We would have to know more about it to know how it changes what we pay now and to determine whether we support any changes in addition to this.”
Some owners believe that 3% will have virtually no effect on them or their customers since the cost is upfront and automatic. Others, however, feel it is unfair and unreasonable in some cases.
Airbnb owner Allison, who declined from using her last name, rejects the title “business,” as she has no employees and pays insurance and utilities for her space.
“There are few similarities between what I do and what a hotel does,” she said. “I should think that the 3% tax hotel tax is, in my particular situation, another way for the state to nickel and dime a population that is living just above poverty — a population that is already overworked and financially insecure and where scraps are better than starvation.”
Allison believes the tax should be situation-dependent.
“In instances where people are renting their second and third home, they absolutely should be paying a hotel tax, as these spaces do produce revenue, have significant tax deductions because they are rental properties and are separate from the host's primary living space,” she said.