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Virginia Beach to Consider Penalty for Airbnb Rentals That Don't Pay Lodging Tax

Open Grid Scheduler / Grid Scheduler / Creative Commons

The old saying goes that there are only two things certain in the world, death and taxes. However, that’s not necessarily true for the short-term rental market.

Hotels in Virginia pay lodging taxes, but what about homeowners who rent their houses through Airbnb? Virginia Beach Commissioner of Revenue Phillip Kellam says most of the Airbnb rentals in his city don’t pay the the taxes they are legally required to fork over, and he estimates the city could be losing as much as $4 million a year. 

“We’re looking for equal treatment here. This is a business."

That’s why the Virginia Beach City Council is now considering a new $1,000 penalty for homeowners who fail to pay the lodging tax. Meanwhile, state leaders are still trying to hammer out how the system will work. Last week, state Senator Bill Stanley confronted Airbnb’s Jillian Irvin about how the system works. 

“So it’s $100 a night but I’ve got 10 percent in taxes, so it’s $110. You’re taking your percentage commission on the $110, not the $100, isn’t that true?"

“This is exactly why we’re here trying to talk about legislation, so that we can deal with exactly this situation."

State leaders are trying to hammer out a series of recommendations for the General Assembly to consider next year. That panel is scheduled to meet again in Richmond next week. 

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