Herald-Whig View

Quincy should apply hotel-motel tax to Airbnb

Posted: Feb. 1, 2019 10:00 am

In 2017, Airbnb, the homestaying service that allows people to rent out homes and rooms as temporary lodging, paid out $9.3 million to the state of Illinois through the state's hotel tax.

That's quite a chunk of change. Wonder how much it paid out to Quincy? Nothing. Zip. Zilch. Nada.

As telling as that is, it's even worse than it looks because Quincy has an 8 percent hotel-motel tax. While the city takes in revenue every time a hotel room is rented, Airbnb stays generate nothing.

Why the difference? It has to do with the city's municipal code, which applies the tax to "a structure kept, used or maintained as or advertised or held out to the public to be an inn, motel, hotel, apartment-hotel, lodging house, dormitory or place where sleeping, rooming, office, conference or exhibition accommodations are furnished for lease or rent, whether with or without meals."

Notably, bed and breakfasts don't fall under that definition, permitting the Airbnb loophole.

Those tax funds are allocated to the Quincy Area Convention and Visitors Bureau and the Oakley-Lindsay Center and used to fund efforts to promote tourism in the city. Notably, the city, in its Quincy NEXT strategic plan, has named tourism as a major growth area.

In 2017, Airbnb reported $130,000 in host revenue in Adams County. In 2018, that number increased to $150,000. There's certainly the opportunity there for the city to apply some sort of tax to the service and send that money toward the city's tourism objectives.

Quincy City Treasurer Linda Moore is aware of the issue and wants to find a solution. She said she's researching other municipalities and hopes to bring a recommendation to the Finance Committee soon. Pittsfield officials also are reviewing a possible ordinance.

The fact that city leaders are looking at solutions is encouraging. Airbnb has indicated its willingness to work with city leaders to remit hotel-motel taxes and has agreements with more than 350 municipalities in Illinois.

Adding a tax would put hotels and motels in the area on an equal footing with Airbnb hosts and force both the lodging industry and Airbnb hosts to compete for customers.

However, municipalities should be careful when crafting their ordinances. They should ensure that ordinances are not crafted in a way that stifles innovation and discourages new Airbnb hosts. A tax applied to hosts should not be used as a way to lock out competition by making the market too expensive for new hosts to enter. This could be done, for example, if the tax only applied to Airbnb hosts who earn more than a set amount. The goal is simply to create competition and benefit the city's tourism sector, not block innovation.

Applying the hotel-motel tax to Airbnb is the right thing to do for Quincy's future, and we urge the city to move quickly before any more potential revenue checks out.