Airbnb: Delivers $324,000 in revenue to Madison in first year of tax agreement


Ben Breit, Airbnb Midwest Public Affairs

Phone: (847) 274-5456

Email: [email protected]

MADISON, WI — Airbnb, the world’s leading community driven hospitality company, announced today that it delivered over $324,000 in home sharing tax revenue on behalf of its Madison hosts in the first year of its tax agreement with the City of Madison, far exceeding even the most generous initial projections.

In March 2017, Airbnb announced a tax agreement with Madison, authorizing the home sharing platform to automatically collect the 10% Madison room tax on behalf of its host community and remit the revenue directly to the city. That agreement took effect May 1, 2017, infusing a new revenue stream for the city to fully capitalize on more people visiting Madison and staying longer through home sharing.

At the time of the March 2017 announcement, Airbnb noted that if guest arrivals and host revenue were to remain consistent with 2016 numbers, it would mean “at least $200,000 in annual tax revenue for the City.” The $324,000 in revenue significantly outpaced those projections.

At the time, the Madison agreement marked Airbnb’s first tax partnership in Wisconsin. It started a trend, with Airbnb announcing similar tax agreements in the ensuing months with the cities of Green Bay and Racine. Most notably, the company also collaborated with the Wisconsin Department of Revenue on an agreement to collect and remit state sales taxes on all Airbnb bookings throughout the state, including in Madison.

Most recently, Airbnb released data indicating the capacity of Madison hosts to help the city take full economic advantage of major events. During the University of Wisconsin commencement ceremony (May 11-12), Madison hosts welcomed 890 guests as hotels reached peak occupancy. In the process, they earned over $100,000 combined in supplemental income.

Additionally, statewide data indicates that Airbnb and its host community appear to be complementing — rather than competing with — the Wisconsin hotel industry. Reports from Wisconsin Hotel & Lodging Association demonstrate that Wisconsin hotel occupancy rates, daily prices and revenue have grown steadily, in parallel to Airbnb’s growth. This suggests that Airbnb is opening up the state to a new slice of prospective tourists by catering to travelers less able to afford hotels, those who desire to stay in neighborhoods or cities that lack hotels, and families who prefer to be together under one roof.