Luzerne County has entered into a contract to obtain hotel tax receipts from Airbnb, an online platform that connects people with available rooms, apartments or entire houses to those seeking lodging.
“The hotel industry is changing, and as such, how we tax and review hotel stays also has to change,” said county Manager C. David Pedri.
The county has a 5 percent hotel tax.
The county treasurer’s office keeps 2 percent of the revenue to oversee the tax collection. As specified by state law, the county Convention Center Authority receives 80 percent of the remaining proceeds for the Mohegan Sun Arena in Wilkes-Barre Township. The other 20 percent goes to the county’s Convention and Visitors Bureau for tourism promotion.
Without the Airbnb contract, county Treasurer’s Office Manager/Tax Administrator Laura Beers said her office had no way to identify and seek payment from individuals accepting lodgers unless they voluntarily came forward on their own.
There are currently 63 hotels and other lodging places registered with the county to pay the tax, including three individuals, Beers said.
“The big question debated across the state is how do counties figure out how many are out there and make sure counties are receiving what they’re supposed to,” said Beers.
She is on a new hotel tax committee established by the County Treasurer’s Association of Pennsylvania to address collection options.
According to the new no-cost contract, which was recently posted on Pedri’s section of the county website at www.luzernecounty.org:
Airbnb Inc. will start collecting the hotel tax and forward receipts to the county on July 1.
The company will handle notification of the fee collection to both those offering accommodations — it calls them hosts — and those booking stays, known as guests.
Hosts and guests privately discuss details about the accommodations, while Airbnb collects payments and offers the internet site for these third parties to find each other.
Airbnb agreed to assume liability for any failure to report, collect and remit the correct amounts to the county. However, the company stressed it won’t be responsible for any transactions guests and hosts make on their own without going through its site.
The company could not immediately be reached for an estimate of the typical number of listings and booked stays in the county.
Its website search option indicates there are more than 300 listings available in Luzerne County, but the resulting list included properties in the Poconos, Scranton and other areas outside county boundaries. Some don’t divulge the addresses on the public site, reserving the specifics for those making booking arrangements.
If reviews are any indication, some county properties have attracted bookings. For example, one attic apartment in downtown Wilkes-Barre listed as an old chauffeur’s quarters had 176 reviews and was available for $78 a night.
Beers said other online lodging services also are cropping up that won’t be covered by the Airbnb agreement.
Pedri said staffers came up with the Airbnb suggestion and will monitor other services and options to collect their fees.
“It’s 2017, and we have to utilize technology to the fullest extent and change with the times,” Pedri said.
The county collected $2.8 million in hotel tax in 2016, according to a report from Beers. After the treasurer’s office administrative fee of $55,952, the office forwarded $2.2 million to the Convention Center Authority and $548,326 to the Convention and Visitors Bureau, the report said.
Collections have increased as more hotels are built. Total receipts were $1.29 million in 1997, the first full year of collection, her report shows.
