Right now, you need to have 12 or more rooms for rent in order to be considered a hotel. But if city officials decide to change the definition of a hotel, you’ll only need to have one.
The proposed change came up during a Monday meeting of the Convention and Visitors Advisory Board and would likely require online renters such as Airbnb hosts to eventually charge guests a 5 percent lodging tax, director of the Convention and Visitors Bureau Amy Schneider said Thursday.
The 5-cent lodging tax has two components: 1 cent is temporary and will pay for improvements to the terminal at Columbia Regional Airport. It was approved by voters in August 2016. The other 4 cents funds the Conventions and Visitors Bureau, Schneider said.
Columbia’s lodging tax was established before the proliferation of small, short-term lodging options such as traditional bed-and-breakfast businesses and Airbnbs, board member Teri Weise said. The board, however, wants to change it to reflect an evolving way of renting, she said.
Online renters provide an alternate way for visitors to stay in Columbia without playing by the same rules as hotels, Weise said. “(The tax) would level the playing field.”
Caitlin Vandell and her husband, Pete Walter, have been renting to travelers through Airbnb three to five nights a week for about three months, and Vandell isn’t surprised this change has been brought up.
“I assumed it would be coming,” she said.
Vandell said she knows Uber and Amazon have started collecting taxes on their services and products, and it makes sense to her because cities need the money to continue functioning.
Because Vandell and Walter only charge about $45 per night, Vandell doesn’t think needing to collect a lodging tax will drive prices up high enough that they won’t still be competitive with hotels.
Vandell also said, though, that she may be more worried about the change if renting out a room in her home were a main source of income.
Airbnb already has contract agreements with many local governments across the country in which it collects the tax and remits it back to the government for the host, Airbnb spokesperson Ben Breit said.
“We would absolutely support Columbia in changing that law, and we would be thrilled to be able to support them by collecting and remitting that tax,” he said.
It’s not yet clear how much revenue applying the lodging tax to online rentals would produce.
“I need to get better numbers ... Right now we’re just looking at changing the definition of a hotel,” Schneider said. However, the more money the tax brings in, the more money the Convention and Visitors Bureau has to attract more visitors, she said.
Aside from leveling the playing field for online renters and hotels, the proposed definition change is also a way to prepare for potential statewide regulations about short-term rental taxes, Schneider said.
There is still a lot more conversation to be had about how it would work, and nothing is set in stone yet.
“We absolutely understand this is a community conversation that needs to be held from many different angles,” Schneider said.