Updated 4:11 p.m.
Pittsburgh was second among Pa. cities — behind Philly — for the number of Airbnb stays in 2016, but the Allegheny County treasurer’s solicitor said efforts to improve tax collection from hosts using online booking agents aren’t going as well as hoped.
Guests showed up in Pittsburgh 47,005 times in 2016 (including people who came here multiple times), according to Airbnb. Hosts made $6,192,895 off of their stays.
But it’s unclear how much money went to Allegheny County through the 7 percent hotel tax from Airbnb and other online booking agents.
In total, the county collected $34,463,458 in hotel tax revenue in 2016. The county considers the total from each hotel entity as proprietary, so there is no breakdown by entity. The county treasurer’s solicitor Michael McCabe of Goehring Rutter & Boehm said roughly $235,000 of the more than $34 million is from online booking agents, largely Airbnb hosts.
The revenue amount provided by Airbnb for Pittsburgh hosts doesn’t include the money the company collects from hosts to pay the Allegheny County hotel tax on their behalf, according to Airbnb.
Airbnb hosts also have the option to pay the county tax directly and not through the company. Hosts must pay the tax and can allow Airbnb to pay it on their behalf, McCabe said.
The hotel tax has been around since the 1970s and applies to any property that is renting rooms to individuals for less than 30 days, he said, adding that even before the internet and Airbnb existed, anybody renting rooms was obligated to pay it.
“It just comes to the forefront now,” McCabe said.
In March 2016, a change allowed for a new way of collecting the hotel tax from those who rent through online booking agents such as Airbnb, HomeAway and VRBO, the Post-Gazette reported. The change allowed for booking agents to collect the tax and pay it on the behalf of hosts, with the goal of making it easier to enforce the hotel tax.
But it “hasn’t proven as effective as we thought it would be,” McCabe said.
He said Airbnb has been cooperative with the county to an extent, but when the county receives the tax money, it’s a lump sum, so there’s no way to tell who paid into it and who didn’t. Unlike with hotels, which are obvious to spot, it’s difficult to know who is renting a room and who isn’t, especially since a host may rent a room just three or four times a year, McCabe said.
To solve the issue, he said, the county is working on contracts with third parties now to see if there’s a way to find property owners who are renting rooms and to find out if they’ve paid the tax.
What the hotel tax funds
Currently, hotel tax funds go to the county general fund, the David L. Lawrence Convention Center, Monroeville Expo Mart, the Sports and Exhibition Authority and VisitPittsburgh, according to the county website on the tax.
The amount collected increased annually by at least $1 million from 2009 to 2015 — but the increase from 2015 to last year was less than $200,000, according to the county.
VisitPittsburgh is hoping to increase revenue to add to what the tax funds.
Last year, the organization asked for state legislation that would allow Allegheny County to increase the tax by 1.25 percentage points to fund a sports commission that would attract more sporting events to Pittsburgh, possibly even a Super Bowl, per the PG. That legislation stalled, but VisitPittsburgh is trying again this year.
A proposed state bill that would allow the county tax to increase by up to 2 percentage points through a “tourism promotion fee” was referred to the House Tourism and Recreational Development Committee last month. And though it would give the county the ability to raise the tax up to 2 percentage points, that doesn’t mean it’s the plan, Craig Davis, president and CEO of VisitPittsburgh told The Incline.
VisitPittsburgh would only ask Allegheny County for a 1.25 percent increase, he said. That would increase the average price of a hotel room in the city from $118.71 to $120.19, per VisitPittsburgh. Davis said the state legislation has bipartisan support, and he’s hopeful it will pass since it’s not an election year.
Part of the additional funds would go to creating a Pittsburgh Sports Commission, aimed at attracting sports events — from amateur to large events — which require more infrastructure in Pittsburgh.
A Super Bowl is here is the “most extreme example,” Davis said. Both the Steelers and Mayor Bill Peduto recently said a Super Bowl in Pittsburgh is not at the top of the priority list, WTAE reported.
A better example, Davis said, would be a Women’s Basketball Final Four that also has a philanthropic component with a basketball program.
In addition to the commission, the additional funds would go to a county administrative fee, a county Asset Improvement Fund, David L. Lawrence Convention Center and convention event fund, Pittsburgh Film Office and Visit Monroeville.