Homer City Council members vote Monday on an ordinance that would put Airbnb and other short-term rental platforms in charge of collecting the city’s sales tax, instead of leaving it to individual hosts.
Councilmember Jason Davis said the platform would collect Homer’s 4.85 percent sales tax when guests pay. It would send the money to the Alaska Remote Seller Sales Tax Commission, which handles local sales tax that online sellers collect. The commission would then pay the city. The ordinance generally covers stays of fewer than 30 days. It does not change the tax rate. The council introduced the ordinance at its meeting last week.
The city’s backup memos say hosts now report and pay the city and borough sales taxes to the Kenai Peninsula Borough, which passes Homer’s share along. Davis noted some hosts ask a platform like Airbnb to collect at booking. Many others collect from guests separately or pay the tax out of rental income. Under the ordinance, platforms would have to collect the city tax on covered bookings.
The ordinance says it does not change the borough tax. The borough has not opted in to the commission’s system, so hosts would still report the borough tax to the borough. City Manager Melissa Jacobsen said that from the borough’s perspective, hosts and property managers would feel the biggest impact. They would report to two separate entities.
Davis said the ordinance would create a more even playing field among hosts and could improve compliance. Whether it brings in more city revenue is uncertain. The commission keeps a fee, currently 7.4 percent, before paying the city, and compliance among hosts is already high, according to borough officials Jacobsen cited to the council.
The draft ordinance leaves the start date for collection blank. Jacobsen added it will be important to hear from short-term rental operators about how the change would affect them.
The council will hold a public hearing at its meeting Monday, September 28, at 6 p.m.
