New Airbnb deal sends tax revenue to Houston Arts

If you rent or rent out your home on Airbnb in Houston, you may have noticed a new local tax show up on your total fees. Last week, a new tax agreement between the popular, home rental platform and local government agency, Houston First Corporation, went into effect.

Starting July 1st, Airbnb’s in Houston will pay an additional 7 percent local hotel occupancy tax. The tax will be added to the 6 percent the company already collects on behalf of the state's hotel occupancy tax.

The revenue generated from that extra 7 percent in taxes will go directly back to boosting the city's tourism, convention and hotel industries. A percentage will also go back towards local art programs, as required by state law.

“Our revenue estimate provided to us by Airbnb is roughly $3 million a year,” said Jonathan Newton, Vice President of Public Policy at Houston First.

“Just like any other hotel tax, Houston First keeps roughly 80 percent of it. The other 19.3 cents of that dollar goes to the city of Houston for funding for their various arts contracts,” Newton said.

Airbnb said $15.3 million dollars in revenue were given back to Texas during the first year of the agreement-- nearly doubling the initial prediction.

“We entered into the agreement now because efforts to enact statewide collection failed in the last legislative session and so we decided instead of waiting another 18 months of taking another crack at it in Austin, we'd pursue it here in Houston,” Newton said.  

Newton said the money will also trickle down into helping rebuild programs and facilities devastated during Hurricane Harvey.

“They can list on other platforms but it's important to note that the liability to collect and remit the tax exists. The responsibility is on the host,” Newton said.

Houston First said it is now working on similar tax agreements with other short-term rental platforms like VRBO and Home Away.