Tax collection is a primary revenue generating activity for any government. However, with Virginia’s localities, collection of tax is amid question with Airbnb. Blacksburg was one of the first localities in Virginia to sign a tax collection accord with Airbnb earlier this year. However, others around the state aren’t sure that’s something to brag about.
The standard used by Airbnb for tax collection stipulates that tax collection authorities won’t receive a list of address where the rooms are booked or names of the taxpayers. Likewise, they won’t have access to the basic information that the government checks to ensure taxes are being assessed properly.
The scheme formulated by the company however makes it significantly easier to collect the money by adding taxes onto bills when customers pay online. That means localities don’t have to collect from hundreds of hosts individually, adding cost and time saving as the two big advantages.
On the other hand, with problems about information being kept secret, the envoy of Airbnb said, His Company is willing to provide details of each and every transaction under audit, but with a precondition that it will be made anonymous in order to protect hosts information.
Maggie Ragon, president of the Commissioners of the Revenue Association of Virginia, said that means Airbnb is asking Virginia communities to take the company’s word for it, while accepting tax revenue from unknown taxpayers.
Airbnb presently has tax collection agreements with more than 23,000 localities worldwide. Besides, in Virginia, the terms of agreement have only made it possible for them to make the service available to Blacksburg and Alexandria.
“It’s really not even a decision as to whether or not it’s a good thing or a bad thing. It’s just — that’s not what the law says you have to do,” Ragon said. “We [commissioners of the revenue] can’t do what we’re prescribed to do under the code of Virginia if we sign those agreements.”