Airbnb occupancy tax: what you owe and how to not mess it up

Category: Pricing & Revenue

By: Megan O'Connor

Posted: 2026-01-29T19:20:08.122Z

I've been hosting for 6 months and just realized I might owe occupancy taxes that Airbnb doesn't automatically collect. My city has a "transient occupancy tax" and a "tourism improvement district assessment" — neither of which Airbnb seems to be handling. How do I figure out what taxes I owe? Does Airbnb collect taxes automatically in all cities? What happens if I haven't been paying?

Reply by David Okafor:

Oh boy. Yeah this is super common — I was in the same boat my first year. So here's the deal with Airbnb and taxes: Airbnb automatically collects SOME taxes in SOME places. But the coverage is patchy. They might collect your state lodging tax but not your city's transient occupancy tax. Or they collect both but miss the tourism district assessment. It's a mess. To figure out what YOU owe vs what Airbnb handles, do two things: 1. Check airbnb.com/help/article/653 — they list which jurisdictions they collect for 2. Call your city's finance department and ask directly. Like, pick up the phone. The website might be outdated but the person who handles TOT registrations will tell you exactly what you owe and how to file. The bad news: if you've been operating 6 months without paying, you owe back taxes. The good news: most cities have voluntary disclosure programs where penalties are reduced if you come forward before they find you. Definitely don't wait for them to find your listing. Going forward — register for your TOT certificate, set aside the tax percentage from every booking into a separate savings account (I use a high-yield savings for this), and file quarterly. Avalara MyLodgeTax can automate most of this if you don't want to deal with it. Honestly get a CPA involved. Tax compliance varies so much by jurisdiction that random internet advice (including mine) might miss something specific to your city.

Reply by Kevin O'Brien:

Pro tip: Airbnb's "Earnings" section shows a tax breakdown for each booking. Download the CSV and you can see exactly what Airbnb collected on your behalf. Compare that to what your city REQUIRES and the difference is what YOU owe. I made a simple spreadsheet: - Column A: Booking gross - Column B: Taxes Airbnb collected - Column C: Total taxes owed (gross × combined local tax rate) - Column D: What I owe (Column C - Column B) File this quarterly with my city. Takes 15 minutes once you have the system set up. VRBO tax collection is different from Airbnb, so if you're on both platforms, check both. VRBO's tax collection agreements are less extensive.