Other Missouri Cities Make Millions By Taxing Airbnb, While Kansas City Misses Out
As Kansas City proposes to slash nearly $900,000 from the budget of the city’s tourism agency, it appears to be leaving at least that much on the table because it doesn’t collect lodging taxes from Airbnb and other short-term guest rentals.
Visit KC, which was known as the Kansas City Convention & Visitors Association until 2014, gets a good chunk of its $11 million annual budget from Kansas City’s hotel lodging tax and private funding from member businesses. Kansas City’s proposed budget projects that hotel/motel taxes will decrease this year by $1.1 million, partly due to the popularity of short-term rentals like Airbnb.
The city insists it can’t collect lodging taxes on short-term rentals without a law from the Missouri legislature and approval by Kansas City voters.
But four other Missouri jurisdictions are collecting the tax, including Independence and St. Louis, and it appears all they had to do was enter into voluntary agreements with Airbnb.
All told, Missouri Airbnb hosts made $75 million in 2019, according to Airbnb. St. Louis Airbnb hosts earned $20.5 million, which translates into nearly $1.5 million in taxes remitted to the city.
St. Louis has been collecting taxes on Airbnb rentals since Dec. 1, 2018, as a result of an agreement with Airbnb. Independence began collecting what it terms a transient guest tax from Airbnb hosts beginning on Oct. 1, 2019, according to city spokeswoman Meg Lewis.
“It’s a voluntary collection agreement, or VCA for short, in which we form an agreement with the jurisdiction to collect all of the taxes at the platform level and then remit them at the state level and then also to local jurisdictions,” said Sam Randall, a spokesman for Airbnb.
Kansas City spokesman Chris Hernandez told KCUR that Kansas City can’t collect the taxes from Airbnb hosts without enabling legislation enacted by the state legislature. He said a state statute defining hotels and motels as structures with more than eight bedrooms prevents Kansas City from collecting lodging taxes from Airbnb rentals.
Kansas City, he said in an email, “does not collect these taxes on places eight rooms or less based on a specific state law that applies to us.”
But St. Louis, which, like Kansas City, is a charter city, doesn’t appear to have been constrained by that state law (charter cities, also known as home rule cities, can do anything a statute or the state constitution does not forbid).
In November 2018, Airbnb reached a tax agreement with the St. Louis license collector’s office to automatically collect a 3.5% convention and sports tax and a 3.75% convention tourism tax for Airbnb bookings within the city.
Two other Missouri jurisdictions collect taxes from Airbnb hosts: Hannibal and St. Charles County.
St. Charles County does so through its separate St. Charles Convention & Sports Facilities Authority, which was created by state statute.
“And there’s a state statute that says there’s a room tax for transient guests, which covers the Airbnb experience,” said St. Charles, Missouri, lawyer Robert Guinness, who represents the authority.
Hannibal officials could not be reached for comment. But guests who book Airbnb listings in that city pay a 6% hotel/motel license tax.
Airbnb did not provide a breakdown for Kansas City hosts, but it said that hosts in Jackson County, which covers a large part of the city, earned $18.2 million. Were the same taxes imposed on that amount as St. Louis levies, that would come to $1.3 million – or more than enough to make up for the proposed cuts to Visit KC.
Visit KC Communications Manager Toni Alexander referred questions about Airbnb rental taxation to Hernandez. But in an email she wrote, "Visit KC is supportive of the City collecting taxes on short term rentals."
KCUR's Laura Spencer contributed to this report.
Dan Margolies is a senior reporter and editor at KCUR. You can reach him on Twitter @DanMargolies.