The City of Los Angeles collected more than $275 million in lodging taxes between August 2016 and June 2023 after entering a voluntary tax collection agreement with Airbnb, officials announced on Aug. 9.
Under what is officially known as the transient occupancy tax, online travel companies collect and remit the tax on the discounted and wholesale room rate agreed upon with the hotel or property owner, rather than on the actual amount the guest pays for the room.
The agreement between the travel company and the city went into effect on Aug. 1, 2016, allowing Airbnb to collect and remit the city’s 14 percent lodging tax on behalf of its host community.
City officials initially estimated the voluntary collection agreement would generate $13 million in annual revenue for the city. But those projections were surpassed in the first five months.
“Home sharing has allowed Angelenos to help make ends meet while contributing hundreds of dollars in tax revenue that helps fund critical city services,” Justin Wesson, Airbnb’s senior public policy manager in California, said in a statement.
The annual revenue has given city officials the resources and “flexibility” needed to fund community programs and low-income housing initiatives throughout the years, according to Airbnb.
“The voluntary tax collection agreement is part of Airbnb’s efforts to support communities around the world,” the company said in a statement. “These tourism taxes are a vital source of funding for local governments and the communities they support, especially in areas that saw revenue streams decimated by the [coronavirus] pandemic.”
According to a survey of Airbnb hosts in Los Angeles, a typical host earned more than $21,000 in 2022; and in total, as a community, hosts earnings in 2020 were well over $375 million.
Tourism taxes collected on behalf of Airbnb hosts in the United States have increased by almost 130 percent since 2019.
