City Council

City Council Approves Tax on Airbnb Rentals

After a lengthy city council process, council members on Monday unanimously approved a tax on short-term rentals effective in 2019.

By Hayat Norimine November 13, 2017

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Starting in 2019, short-term rentals like Airbnb will be taxed in Seattle.

City council members on Monday unanimously approved a tax on short-term rentals like Airbnb, which will raise an estimated $7 million a year to be spent on the city's initiative for to curb displacement. An amendment from council members Mike O'Brien and Lisa Herbold raised proceeds by $1 million by taxing $14 per night for an entire unit, $8 for a private or shared room, instead of a $10 flat rate. 

The idea behind the legislation is to disincentivize homeowners from using their properties as short-term rentals, rather than providing longterm housing for residents locally. The bill would cost the city an estimated $2.8 million, nearly $2 million to develop software systems and the rest for outreach and hiring three staff members.

It's possible the state legislature or King County could enact the same tax—and if that happens, it puts city officials in a tough spot on whether they should suspend its tax, and risk losing the $2 million investment in software alone, or double-tax those rentals. 

Though now-Mayor Tim Burgess originally wanted to have a provision that stated Seattle's tax would go away if the state were to enact its own tax, a Rob Johnson amendment doesn't bind the city to that; rather, it says the city could consider stopping the tax if that jurisdiction agrees to give the city the same revenues.

Council members narrowly voted to delay the bill on regulating short-term rentals itself—which couples the bill that enacts the tax—when Johnson asked for more time, among protests from both owners of short-term rental companies and affordable housing advocates. Johnson inherited the bill in his Planning, Land Use, and Zoning Committee after Burgess left the council to become mayor. 

"There are still issues to be worked out," Johnson said. "This work is the kind that is better suited for committee."

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