Travel Tech


Requiring ‘lodging facilitators’ to collect state sales tax on rentals


Much of the tax policy debate at the statehouse has focused on tax cuts, but there are tax increases under consideration — including a tax increase in the travel industry that’s included in Governor Kim Reynolds’ proposal. Christopher Rants, a lobbyist who represents an online travel association known as Travel Tech, brought the issue up with lawmakers during a hearing late last week.

“There is a definition of a lodging facilitator and a new definition of what the sales price is for lodging,” he says. “Both of these pieces seek to change the relationship between a customer and either a hotel or a person who may be leasing or renting out their home, maybe it’s through VRBO, HomeAway or something like that.”

VRBO stands for “Vacation Rentals By Owner.” According to Rants, the way the new definition is written, the state sales tax must be paid by the “lodging facilitator” — even though that person, maybe a realtor, or an entity like Facebook — may not be taking the payment for the rental.

“If you’ve ever been up at the (Great) Lakes and you see the little pamphlet that’s put out that lists all the places that are for rent this summer, they’re now a lodging facilitator,” Rants says. “If it’s a social network that somebody puts their house up for rent at the lake for the summer, they put it on a social network — the social network is now the lodging facilitator or it can be someone who does this for a living, like a travel agent. The travel agent is now the lodging facilitator.”

People who book through AirBNB are to pay the Iowa sales tax as well as any city lodging taxes as part of their on-line reservation.