“Lodgers’ taxes help support the local economy and are already being paid by guests of hotels, motels and bed & breakfasts in Taos and Santa Fe,” states a press release. “Many individual short-term rental owners already collect and remit tax, but this new relationship with Airbnb will substantially increase the level of compliance.”
Compliance has been a problem in Santa Fe where it is estimated that more than 1,000 short-term rental providers are operating illegally under an ordinance that allowed for just 350 short-term rental units. City officials acknowledged that part of the problem resulted from the increased presence of online companies like Airbnb, VRBO and Roomorama.
Earlier this year, the City Council voted to increase the limit from 350 to 1,000 and the amount of fines for those to be found in violation. Under the amended ordinance, after Aug. 9 those in violation are subject to a $500 fine and $250 per day if the matter is not rectified after 14 days.
Randy Randall, the city’s director of tourism, said those who submit applications to operate short-term rental units by Aug. 9 will not be subject to the fines. He said so far the amended ordinance has generated about 150 new applications for short-term rental permits.
The matter came up during budget hearings when the city was seeking ways to close a projected $15 million deficit this fiscal year. A study commissioned by the city last year suggested that the city was losing up to $2.1 million in lodgers taxes annually from unlicensed short-term rentals, and that associated uncollected gross receipts taxes were between $524,893 and $2.5 million.
But on Wednesday Randall said that between lodgers’ and gross receipt taxes the city is expecting to generate $650,000 more revenue annually.
Hotel operators in cities across the country have complained that Airbnb hosts had an unfair advantage because they rent rooms at a lower rate by not paying taxes.
Messages left for officials with the town of Taos were not immediately returned Wednesday, but a statement from the town’s Director of Marketing and Tourism Karina Armijo was included in the press release.
“The new agreement with Airbnb will level the playing field for local business owners,” said Armijo “With it, we also expect an increase in revenue to the Town and more rooms available for travelers.”
Last month, Airbnb announced that it had made agreements with 190 cities, states and other taxing jurisdictions worldwide to collect and remit taxes from users to government entities.
According to Airbnb, more than 57,000 people used Airbnb in New Mexico in 2015. In all, there are about 1,500 hosts in the state with Santa Fe and Taos having the highest numbers of available rentals.