Airbnb works out deal with town of Breckenridge to begin collecting taxes on hosts’ behalf
BRECKENRIDGE — In February 2017, Airbnb began collecting sales taxes for the state of Colorado, which was formerly a job given to the hosts. However, all four major towns in Summit County — Breckenridge, Dillon, Frisco and Silverthorne — are home-rule municipalities, which means Airbnb must have a separate agreement with each town, signed by each town’s council, in order to collect town taxes.
More than two years after the initial agreement with the state of Colorado, Breckenridge became the second town in Summit County, after Silverthorne, to enter into an agreement with Airbnb on this issue. The agreement will take effect Tuesday, Oct. 1.
As stated in the company’s press release, the agreement mentions that Airbnb “will begin collecting and remitting the town’s 3.4% Public Accommodation Tax and the 2.5% Sales Tax on behalf of its hosts and guests on all short-term stays of less than 29 days.”
Those who book an Airbnb reservation will be charged taxes when they book, and Airbnb will provide the town of Breckenridge with the taxes collected. Currently, Airbnb collects the Colorado sales tax, the Summit County sales tax and the Summit Combined Housing Authority’s multijurisdictional housing authority tax. Now, instead of Breckenridge hosts collecting and remitting the public accommodation and sales taxes for Breckenridge, Airbnb will do so on the hosts’ behalf.
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Since these taxes already were being collected, guests will not be paying additional taxes as a result of this agreement when they book an Airbnb. The Denver Post reported that these agreements may bring more money to municipalities as not all hosts remit the taxes they collect, but Leslie Fischer, accounting services manager for the town of Breckenridge, said this is not the case in Breckenridge.
“We already have a very high rate of compliance in the short-term rental sector, so more than anything, it’s more of a customer service to the tax payers,” Fischer said in reference to the hosts who otherwise would have to navigate tax collection and remittance.
Fischer said short-term rental tax collection has been a standard, organized practice in Breckenridge for a long time, which is why they have found high rates of compliance. However, Fischer explained that the way hosts had to collect and remit taxes through Airbnb could be confusing and inconvenient, so the agreement simply makes things easier for hosts.
Fischer also added that Breckenridge will be collecting taxes only from hosts whose properties are within town limits. She said some hosts receive letters about the agreement from Airbnb who are in unincorporated parts of the town. These hosts will not be subject to Breckenridge taxes and are encouraged to notify Airbnb that they are not located within Breckenridge town limits.
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