News and Insights

Washington Issues Tax Topic on Airbnb and Airbnb Host Tax Obligations

Tax Development Dec 13, 2016

The Washington Department of Revenue (“Department”) recently issued a Tax Topic discussing Airbnb’s tax collection activities and Airbnb host tax responsibilities. As of October 15, 2015, Airbnb collects and remits the following taxes to the Department on behalf of Airbnb hosts:

  • State and local retail sales tax,
  • Special hotel/motel taxes, and
  • Convention and trade center taxes.

Hosts remain responsible for remitting tax on any lodging sales made prior to October 15, 2015.

Although Airbnb is collecting and remitting the aforementioned taxes for sales occurring on or after October 15, 2015, hosts must still register with the Department and report their rental income. However, they can claim a deduction for any rentals made through Airbnb beginning October 15, 2015. The deduction should be itemized as “Other” along with an explanation that the tax for these sales was collected and sent by Airbnb. Deductions are not allowed for Airbnb charges such as service fees or commissions as they are considered a cost of doing business. If any retailing business and occupation (“B&O”) tax remains due after taking the deduction, the host must pay such tax. 

We recently discussed Airbnb’s tax agreement with the state of Idaho. While dated last year, this development is important for its awareness for highlighting that the state of Washington has a B&O tax in addition to traditional sales and hotel taxes. 

For more information, please see Washington Tax Topic: Airbnb to collect and send taxes on behalf of hosts, December 5, 2016.