Houston First Corporation and Airbnb, the online home sharing platform, have announced a breakthrough agreement in which Houston’s Hotel Occupancy Tax (HOT) will be collected from Airbnb customers which started July 1.
The 7 percent tax on Airbnb rentals will flow to Houston First, a government corporation that promotes and markets Houston’s travel, tourism and arts communities around the world and operates the city’s finest convention, arts and entertainment venues.
Houston becomes the largest Texas city to reach an agreement with Airbnb for collection of the HOT, required by state law to be used to boost the city’s travel and tourism industries and local art (Tax Code 351). HOT may be used only to directly promote tourism and the convention and hotel industry. Also by state law, 19.3 cents of every dollar collected goes to city arts programs. Houston has the highest percentage in Texas of HOT funding dedicated to the arts.
HOT collections by Airbnb are expected to generate $3 million a year in Houston.
“Airbnb’s agreement to collect a tax that had already had been levied on hotel and motel guests will boost Houston First’s efforts to further increase the number of visits to Houston, which drew a record-high 22.3 million people in 2018,” said Mayor Sylvester Turner. “In turn, that will mean more dollars flowing into the Houston economy, creating even more jobs and benefitting Airbnb’s business and its affiliated local hosts. The additional funding for Houston’s thriving arts scene is icing on the cake and will add to the dynamic forces that are making Houston a more attractive place to enjoy for residents and visitors alike.”
Airbnb has partnered with over 400 local governments throughout the U.S. to collect and remit taxes, making it easy for hosts to pay their fair share while contributing new revenue for local governments. The company already collects the Texas State Hotel Occupancy Tax on behalf of all hosts (including in Houston) under an agreement with the Texas Comptroller’s Office. Airbnb delivered $15.3 million in tax revenue to the state in the first year of the agreement, nearly doubling the initial expectations.
“This additional revenue will further support Houston First’s mission to promote our city as a premier global destination and build partnerships to improve the quality of life of Houstonians,” said Brenda Bazan, president & CEO of Houston First. “We appreciate the role played by Airbnb and local Houstonian hosts in complementing our booming hotel industry and supporting tourism growth.”
“We believe this partnership will unlock significant new revenue for Houston moving forward, as it has for the state,” said Laura Spanjian, senior public policy director for Airbnb. “Our Houston hosts have stepped up time and time again, from supporting neighbors during Hurricane Harvey to generating economic activity in underserved communities, and now their efforts will benefit the Houston tourism and art communities as well.”
“This is a great day for Houston’s art community, as we count on this revenue to grow our vibrant arts landscape. We know that arts and culture fuel tourism for Houston,” John Abodeely, CEO Houston Arts Alliance. “We hope other short-term rental platforms will follow Airbnb’s good-citizen example.”