Philly Is Getting an 8.5% Airbnb Tax

City Council passed the new tax today. Mayor Michael Nutter is expected to sign it into law.

Photo courtesy of Airbnb

Photo courtesy of Airbnb

Airbnb is about to get a lot less laissez-faire in Philadelphia.

City Council passed a bill, 15-0, Thursday, which is expected to be signed into law by Mayor Michael Nutter, that will force anyone who rents out their home on Airbnb or similar websites to pay Philly’s 8.5 percent hotel tax. That’s just the first new rule that will go into effect under the legislation: Hosts who rent out their homes for more than 90 days will have to get a rental license, and no one will able to rent out their homes for more than 180 days annually.

Currently, many people who use Airbnb in Philadelphia are technically part of the city’s black market, since short-term rentals are not permitted in residential areas. This new bill will legalize the industry.

Depending on how you see it, the fact that Airbnb has operated outside of the confines of government restrictions is either a good or bad thing. The Greater Philadelphia Hotel Association argues that not taxing or regulating Airbnb gives it an unfair advantage, while hosts who rent out their rooms say that they are nothing like a full-staffed hotel operation and are just trying to put a little extra money in their pockets.

When Councilman Bill Greenlee proposed the Airbnb tax on behalf of Nutter in May, he said that demand for rentals would “hit the roof” when Pope Francis visits Philadelphia in September. So, this is also seen by some as a money grab by the city.

A spokesman for Mayor Michael Nutter said the city does not have an estimate on how much revenue will be collected from the bill.

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  • GT12

    How do they plan on collecting? Are they asking for info from Airbnb?

    • tsarstruck

      Airbnb already does this for several municipalities. And the bill requires that the “booking agent” of these “limited lodging” rentals either remits the taxes or provides the city an annual list of them. There is a 0% chance that Airbnb won’t be collecting the tax.

      And, to be clear: anyone who has been doing illegal short term rentals (aka, everyone renting via Airbnb) already owed this tax. So this, no matter what anyone is saying, is not a “new” tax: it’s just a new way to enforce the tax. It’s also been amended in a few (good) ways in council, limiting additional “guests” of the lodger to 8 AM to midnight (aka, no parties in Airbnb rentals), no separate entrances, and some other logical stuff.

      The one thing that many people are not going to like is the limit on the number of days per year the lodging can be rented (180 days with a use permit, 90 days without) and especially that the primary use still has to be household living. This will stop Airbnb operators essentially operating housing units as de facto hotels year-round. I see no issue with this, as many cities have had problems with them, and they’ve been linked to housing shortage problems in other cities.

      This is a win for Airbnb, a win for Philadelphia’s ability to house guests to our great city, and a win for Philadelphia’s revenue. I would love it if Joel Mathis took a second look at his kneejerk, factually and conceptually wrong reaction when this bill first came out: http://www.phillymag.com/news/2015/05/11/philadelphia-airbnb-tax-pope-visit/.

      • Tom

        AirBnB is fine, but when people in planned unit developments, homeowners associations and such start renting to strangers, risk is inevitable, both financial and personal safety. We have a jerk doing it where we live now, but it’s going to end soon. Using common areas for “guests” is BS. If you have your own door to the street, fine, go for it. But who will these guests sue when they fall, get mugged or whatever? The rest of the homeowners, who else? And if they turn out to be less than honest, perhaps even criminal types? Who provides the vetting? Nobody. This is the next issue for these makeshift hotels. People who do it without the knowledge of their landlords, homeowners associations, condo associations etc.

    • LOLOL

      Yep. Airbnb is a “booking agent” under the ordinance. They will collect the tax and pay it.

      • Ryan

        Where can I find the ordinance?

        • LOLOL
          • ImperialFrog1976

            You think AirBnB would just hand over this data? Losing tons of revenue in the meantime, since now it’s way less economical to post your place using their service?

          • SaveHospitalityJobs

            They’ve been asked for data before. They lie or say “our hard drive is broke.” They are miserable liars.

          • LOLOL

            ImperialFrog1976: Uh, yeah, if they want to stay in business as brokers for Philly and Pennsylvania users.

          • ImperialFrog1976

            Just like uber

  • Not anyone is going to pay it

    Let the shack down of the Catholics continue!!!

    • tightlines

      Shaq down.

  • CJames24x

    What a Christian thing to do!

  • Marc

    Only ones making money with a 180 limit would be the city. After expenses and mortgage payments, owners would lose money.

  • Christie

    Interesting that the mayor and city council can move so quickly when it comes to instituting yet another money grab for the city but can’t seem to move to shut down Uber x and Lyfte that both operate illegally without proper licenses or insurance. Typical bureaucrats.

    • KG

      PPA is a state organization enforcing PA’s rule on Uber/Lyft. Mayor Nutter supports the ride hailing apps http://cbsloc.al/1Gmb4cC

    • Fish Town

      I drive for Uber and know I am very much insured (and had to prove so) and have additional insurance through the organization.

  • HolyFrijoles11

    Love the idea – except how will they collect?

  • SaveHospitalityJobs

    Hotels have paid taxes since day one. Airbnb should pay taxes RETROACTIVELY and then get thrown out of town. They ruin neighborhoods and cost jobs.
    http://www.savehospitalityjobs.com

    • John Digmeme

      then we need some alternative hotels that don’t cost $100 or more a night, right? clearly there is a demand for clean, interesting budget accommodation that is not being fulfilled by the formal hospitality industry.

  • James

    Does this just apply to renting a whole house or is there a difference if you’re just renting a room in the house while you’re living there?