The City of San Antonio must make the signing of an agreement with Airbnb to collect local taxes on the behalf of hosts a top priority. Every month that an agreement is not reached, the city loses out on approximately -$200,000 in tax revenues, while at the same time legally operating hosts lose 10.75% of their earned rental revenue straight out of their pockets instead of guests paying the tax as is industry norm. In addition, the city of San Antonio is knowingly continuing an environment where many residents are accruing back taxes, penalties, and interest because they are unaware of the taxation law that has not previously been clear for short term rentals or they do not understand how to appropriately pay their taxes in the unnecessarily complex system where an agreement with Airbnb to collect owed taxes exists at the state level but not the local level.

These issues are outlined below, and it is our hope that awareness of the damage being done to San Antonio and its residents by not having an agreement in place with Airbnb to collect local taxes will lead to action by our representatives that will immediately increase tax revenues for the city and put more money in the pockets of small business owners and residents who are trying to earn extra income for their families or offset ever increasing property taxes.

Airbnb currently has an agreement with the State of Texas to remit 6% of revenue for State taxes. After signing this agreement, Airbnb adds the 6% State Tax on top of the nightly rental rate, passing the taxes on to the guests. However, with no agreement in place with San Antonio to collect local taxes, Short Term Rental operators are being required to pay 10.75% of their revenue for city and county taxes. Those taxes are NOT passed on to guests and are instead taken out of the nightly rate and cleaning fees that the rental hosts should be retaining in full. In addition, because no agreement is in place, the government is relying on the effectiveness of 3rd party contractors to identify when a rental is operating without paying local taxes. Currently the compliance rate is less than 15% even post ordinance passage. Moreover, in other cities, a “successful compliance percentage” for these 3rd party operators is considered 60%. That means 40% of rentals are able to operate without paying taxes while the other 60% must pay 11% of their revenue to taxes, making the market unfair and allowing non-compliant hosts to undercut the legal rental market.

By signing an agreement with Airbnb, hosts that are currently paying their taxes will immediately start seeing a 10.75% increase in their take home rental revenue, since that 10.75% would be shifted from the host charged nightly rate to taxes paid by guests visiting the city. In addition, the city would immediately garner 100% compliance on Airbnbs. Airbnb hosts in Bexar county generated $28 million dollars in revenue in 2018 according to recently released numbers by Airbnb, so the city would immediately see an increase from less than 15% compliance to 100% compliance on taxes for those revenues, which means the city would have generated $2.6 Million dollars in tax revenue vs. $451k in tax revenue in 2018. Therefore, by not having an agreement between Airbnb and the city in place, the city lost out on $2.1 million dollars that, if an agreement had been in place with Airbnb to collect those taxes from guests, would have come from directly from guests not hosts. That agreement would have also put all Airbnb hosts in tax compliance and prevented thousands of dollars of interest and penalties to accrue for operators who were unaware of taxes for Short Term Rentals while also increasing the take home revenue for the hosts that paid taxes in 2018 by 10.75%. Not having an agreement with the Airbnb in 2018 was a $2.6 million dollar mistake, and that number is projected to increase by 30% in the next year based on Airbnb released revenue data for Bexar county. That mistake also cost tax paying hosts 10.75% of their take home revenue and resulted in many hosts who were unaware of the taxes owed to accrue thousands of $’s in back taxes, penalties and interest. Our representatives must be made aware of this mistake and act quickly to correct the situation going forward.

There has been a substantial national efforts by the American Hotel and Lodging Association and other lobbying organizations on the behalf of hotels to pressure city governments to not accept these agreements. This petition is the response from the citizens of San Antonio who want our voices and concerns heard over those of the hotel industry. By reaching an agreement with Airbnb, the city will immediately ensure tax compliance across all Airbnb bookings, a stated goal of the city when justifying further regulation, increase city tax revenues by approximately +$200,000 A MONTH, and put an average of +$200-$500 dollars more a month into the pockets of residents operating legal rentals. The only interests that would not directly benefit  from this agreement are rental guests, who now have to pay taxes that are being paid by hosts but were designed to be paid by tourists to begin with, and the hotel industry that does not want cooperation between the government and hosts and would prefer fines to stack up on inexperienced non-compliant hosts and to reduce the profitability for compliant hosts so that they have a competitive advantage in being able to pass on all taxes directly to guests.

 It is the obligation of our representatives to come to the same agreement that the state has already agreed to with Airbnb for collecting occupancy taxes. This is an agreement the Texas State Comptroller has hailed as extremely successful and a huge boost in tax revenue for the state. Our government has an obligation to follow the precedent set by the state, and in doing so, give legal rental operators in San Antonio back the 10.75% of their revenue that are unjustly being charged to the hosts instead of guests at the local level so those residents can spend it on their families, to help offset rising property taxes, or spend back into the local economy.

By not treating the agreement with Airbnb to collect local taxes as a number one priority, the city is being negligent in their responsibility to act in the best interests of the citizens and to enforce the regulation and taxation laws as effectively and evenly as possible.

Every month that San Antonio does not reach this agreement with Airbnb, the city loses $200,000+ in tax revenue. Every month the San Antonio does not reach this agreement they are knowingly allowing citizens who are unaware of regulation and taxation requirements to accrue penalties and interest on the revenues that Airbnb would automatically be withholding otherwise. Every month the city does not sign an agreement, every law abiding host is losing hundreds of dollars straight out of their pocket from rental revenues.

Please sign and let our elected officials know that we demand that they act in the interest of the city and its residents by securing the same agreement Airbnb has reached with the State and 370 other local governments in the US to collect local taxes. If you have 10 minutes, give them a call and let them know this is important. Every day that this agreement isn’t established the City of San Antonio, its residents, and the families of law abiding citizens are losing money, with the only benefactors being the hotel industry…Make your voices heard!