Airbnb rentals in Illinois will be getting more expensive next month.
Beginning Jan. 15, the San Francisco-based home-rental platform will collect and remit on behalf of its hosts the same hotel taxes paid by its hotel counterparts, the company announced today.
It’s the latest step by Airbnb to put its rental properties on the same tax and regulatory ground as hotels. In February, the company began adding the city of Chicago’s 4.5 percent hotel tax to its Chicago hosts’ bills, but it has not added the remaining 11.9 percent state tax that hotels are required to remit.
While Airbnb properties always have been subject to both the city and state portions of the hotel tax, the onus had been on hosts to collect and remit the taxes on their own, with little oversight. The moves by Airbnb automatically include them in renters’ bills.
“We’re happy to be taking this important step that helps our host community and makes Illinois stronger,” the company wrote in a blog post announcing the new Illinois tax policy.
The move is a win for state coffers and Chicago hoteliers, as it brings the total hotel tax collected by Airbnb properties in Chicago to the full 16.4 percent that hotels collect. That includes a 6.17 percent state hotel tax, a 1.08 percent municipal hotel tax and other taxes totaling 4.64 percent that fund the Illinois Sports Facilities Authority and the Metropolitan Pier and Exposition Authority, which operates the McCormick Place Convention Center.
Beginning May 1, all hotels will add 1 percentage point to that tax rate as a result of Cook County’s newly passed 1 percent hotel assessment. It is unclear whether Airbnb will collect that tax as well.
Illinois hotel operators have long argued that Airbnb properties—which numbered 4,550 in the year ended June 30, according to the company—should be on the hook for the same hotel taxes that they collect as they compete for Chicago visitors.