Airbnb tax collection agreement more than doubles tax revenue for Blacksburg

The agreement netted $32,800 for the town, up from $13,400

By Brittny McGraw - Anchor

BLACKSBURG, Va. - One New River Valley town is reaping the benefits of a tax collection agreement with a popular homesharing service.

The agreement between Blacksburg and Airbnb took effect in August, and the town said it's more than doubled tax revenue.

"(We're) one of the first localities in the state of Virginia to catch up with this new technology, this new platform, and I think it was wise," said Mayor Leslie Hager-Smith. "There's a deluge of people now who understand this is a practice that's here to stay."

Under the agreement, Airbnb now automatically adds a 7 percent homestay tax to guests' online bills and then sends the money directly to Blacksburg.

"The trial period, during which we're testing this out, allows us, for no cost at all, to have Airbnb collect the taxes," Hager-Smith said.

The town said it netted $32,800 in taxes from August 2018 through November 2018, which is more than double the $13,400 the town collected during that same time period in 2017, before the agreement was in place.

"The figures indicate that we're ahead," Hager-Smith said. 

Some organizations, including the Virginia Municipal League, have been critical of Blacksburg's ability to fully audit Airbnb because the company doesn't provide names and addresses related to its stays. Hager-Smith said that is not a concern.

"We have a situation where you have to register anyway, so we began from a place where we know who is registered. But in any event, we thought that was a small downside to adopting a system that would be considerably more efficient," she said.

Hager-Smith said that, with more services such as this popping up, it's important that town leaders keep up with what's next.

"There needs to be a willingness to adapt and that, I think, Blacksburg is especially good at," she said.

Blacksburg and Alexandria are the only communities in Virginia to use this agreement to collect taxes through Airbnb. 

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