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In practice, taxes on short-term rentals are typically passed on to the guest as part of the total booking cost. Short-term rentals in Washington state are being targeted for funds that would help pay for affordable housing across the state. (Airbnb Photo)
Opponents rallied at the Washington State Capitol in Olympia on Tuesday to voice their displeasure for a bill being considered by the legislature that would impose a 6% tax on short-term rental bookings across the state to help communities fund affordable housing.
The action was organized by vacation rental giant Airbnb in coordination with Washington Hosts Collaborative Alliance (WHCA), an Airbnb-backed and host-led organization that says it’s dedicated to “fair, common-sense regulation” of short-term rentals.
San Francisco-based Airbnb recently launched a new political action committee in Washington called Airbnb Helps Our State Thrive (HOST) PAC. The PAC’s intent is to advocate for residents and communities who rely on home sharing and would be negatively impacted by a new tax. Flush with $1 million, the PAC took out a full-page ad in The Seattle Times Tuesday advising Washingtonians to “say no to the vacation tax.” A companion website asks people to sign up for related updates.
“We support policies to help boost housing supply across the state, but a tax that creates an unfair competitive disadvantage for Washingtonians who share their home to make ends meet is not the right approach,” the PAC said in a statement to GeekWire. “We welcome the opportunity to work with lawmakers on other legislative efforts that help bolster affordable housing supply in Washington.”
Washington Sen. Liz Lovelett, D-40. (Photo courtesy of Lovelett’s office)
The lead sponsor of Senate Bill 5576 is Sen. Liz Lovelett, a Democrat and Anacortes native representing northern Puget Sound’s 40th District who was elected to serve as Senate Majority Deputy Leader in 2024.
The aim of the bill — and companion House Bill 1763 — is to address a shortage of funding for housing, especially in cities and towns where short-term rentals have had an impact on the availability of affordable properties for people who live and work in tourist-heavy locales.
Lovelett estimates the state could use hundreds of thousands, if not a million, new housing units over the next 20 years, and that somewhere near 35,000 units are wrapped up as short-term rentals.
“There’s obviously a fairly easy nexus to recognize between a lack of housing existing in areas that have a lot of tourism and the proliferation of short-term rentals, especially in the last decade,” she told GeekWire.
Lovelett proposed a similar bill in 2023 that would have given local governments the option to impose a tax. She said she’s talked to plenty of Airbnb hosts who would much rather see a modest excise tax on rentals rather than outright bans, which she said is happening all over Washington and across the country. Beyond taxes, communities are debating how best to manage the rise of vacation rentals.
In the town of Glacier, near Mt. Baker Ski Area, housing is “borderline impossible” for people who work there and help make the town run because of vacation rentals, according to a report last week in Cascadia Daily News.
“We are fighting to keep a community. We’re in danger of just becoming a resort. We don’t want that,” Leavenworth Mayor Carl Florea said during a public hearing last fall over proposed changes to a short-term rental code in Chelan County.
Short-term rental hosts gather at the Washington State Capitol in Olympia during a rally against a proposed Senate bill. (Photo courtesy of Allison Moser)
WHCA represents more than 16,000 short-term rental hosts, property managers, and affiliated service providers such as cleaning and maintenance contractors across Washington.
Allison Moser of Gig Harbor is president of the organization, and owner an Airbnb property in Tacoma which she and her husband Richard use as supplemental retirement income.
“I never thought that I would end up being the president of a statewide group, because I was just going to be in the garden club enjoying my retirement,” Moser said by phone Tuesday as she arrived in Olympia for Tuesday’s rally. “Now it’s my new full-time second career.”
Moser said the rally attracted about 70 people and that several hundred hosts have contacted their representatives on WHCA’s behalf.
WHCA is concerned about what it calls financial, equity and quality of life issues in the state. Moser cited tough economic times, and high gas and grocery prices. In six years as a host, this winter has been the couple’s worst in terms of low bookings and they’ve had to lower prices to try to fill their calendar.
Moser said some hosts rent out space in their own homes or accessory dwelling units because they need extra income to be able to afford property expenses. Airbnb said a 2023 survey of Washington hosts found 80% use the money they earned by hosting to cover the heightened cost of living.
“We don’t have unlimited resources,” Moser said, adding that a tax not only hurts hosts but also Washington residents who travel and vacation in-state and use short-term rentals.
In practice, taxes on short-term rentals are typically passed on to the guest as part of the total booking cost. The rental platform, such as Airbnb, is responsible for facilitating and collecting the tax at the point of booking and remitting it to the state.
In 2017, the Seattle City Council approved taxes of $14 per night for entire homes and $8 per night for rooms, with proceeds intended to be used to support community-initiated development projects and create affordable housing.
Other states and localities have enacted similar legislation to raise funds. In January, Delaware began imposing a 4.5% lodging tax on all short-term rental properties, with funds going toward the state’s general fund, beach preservation, tourism, and more. Vermont added a 3% surcharge last year to help fund state education.
Airbnb points to taxes that are already collected by the state of Washington on bookings. The company said approximately $78 million in tourism taxes were collected and remitted by Airbnb on behalf of hosts in Washington in 2023.
Airbnb said it supports fair and reasonable short–term rental rules that strike a balance between community needs and residents’ ability to earn supplemental income by sharing their home.
In fourth-quarter earnings reported last week, Airbnb exceeded expectations with revenue of $2.5 billion, up 12% year-over-year. “Airbnb is a fundamentally stronger company today than it was several years ago,” the company said in a letter to shareholders.
Lovelett said her sympathies are with hosts who are renting out a room in order to cover bills and expenses. But she said it was “administratively infeasible” to parse out different types of rentals and enforce different regulations.
If the bill, which is currently in front of the Senate Ways & Means Committee, does go statewide, Lovelett said it would add $50 million annually into local governments.
“There’s so many jurisdictions that are coming to us for state appropriations for capital projects to build affordable housing in their communities, and this would really go a long way toward local governments being able to put some skin in the game on solving their own local housing issues,” she said.
