City of Madison wants to collect room tax fee from Airbnb

City of Madison wants to collect room tax fee from Airbnb

Flipping through her guest books, Madison resident Beth Skogen has welcomed more than 200 people into her home over the past four years.

“Instead of having a roommate, I thought having random people from all over the world would be a good decision,” Skogen said.

She said it’s been possible after signing up as a renter with Airbnb.

“I’ve made some really great connections. I actually have a guest right now who’s stayed with me about 10 times. We actually did a bike ride across Iowa together, so it’s been really amazing,” Skogen said.

Even with all of the great memories she’s made, Skogen started to feel a little uneasy about the process.

“There was an article in a local newspaper about two years ago that started to bring up questions about Airbnb, and the licensing and the hotel industry,” she said.

According to the city of Madison, there are about 400 housing units in Madison utilized for Airbnb rentals, but only 20 comply with state laws. To stay on the safe side, Skogen made her home a licensed bed and breakfast, but it was a lengthy process.

“There were a lot steps. I had a public hearing and paid about a grand in all,” Skogen said.

The city is hoping to relieve other Airbnb renters from the same process, but still get its 9 percent room tax fee.

“The way it will work is that Airbnb will collect the room tax and remit it to the city treasurer,” said Mike Verveer, City Council president.

Verveer and other members of the city’s Board of Estimates unanimously passed an agreement with Airbnb to start collecting those taxes. The agreement will be voted on by the Common Council next Tuesday. If it passes, the city can start collecting taxes from Airbnb this summer. The room tax would bring in nearly $200,000 in revenue.

Verveer said this agreement will in no way affect Airbnb renters from taking extra steps, but it will be more expensive for those looking to rent.

He wants to ensure the short-term lodging in Madison will continue to prosper.

“None of us at City Hall are trying to dissuade people from renting out rooms in our community. We’re only trying to ensure compliance with existing laws,” Verveer said.

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