Airbnb, an online short-term housing and hospitality marketplace, has finalized a tax agreement with the State of Michigan that will allow the company to collect and remit state-level occupancy taxes on behalf of its Michigan hosts. With the tax agreement in place, Michigan will be able to fully capitalize on more people visiting the state and staying longer through home sharing.
Effective July 1, Airbnb will automatically collect and remit taxes to the Michigan Department of Treasury on all Airbnb bookings. The company has partnered with hundreds of governments globally to collect and remit taxes, though this marks Airbnb’s first tax agreement within Michigan.
Airbnb also announced a similar home sharing tax agreement with the State of Wisconsin, and already has agreements win place in Chicago, Cleveland, Madison, and the States of Wisconsin and Illinois.
“Home sharing is introducing a whole new world of travelers to the authenticity of Michigan while offering new economic opportunities for thousands of local residents,” says Will Burns, Michigan policy director for Airbnb. “We are so proud to have collaborated on this agreement which will unlock a brand new tax revenue stream for the State of Michigan.”
In 2016, Airbnb reported Michigan hosts earned $25.2 million in supplemental income while welcoming approximately 188,000 guests to the state. Detroit specifically was one of 12 global launch sites for the company’s new experiences platform, which offers guests handcrafted activities designed and led by local city experts. Launched in Nov. 2016, experiences offers access and insights into communities travelers wouldn’t otherwise come across using traditional tourism platforms.
Michigan currently boasts 4,900 active Airbnb hosts, and 33 percent of Michigan listings are simply extra, unused rooms in a host’s home. The average Michigan listing is rented out less than three days per month, and the median host earns $4,800 annually through Airbnb.