Airbnb Will Collect State, Local Taxes in South Dakota

Those traveling to South Dakota will now be paying taxes on their Airbnb booking.

by Sioux Argus Leader / August 22, 2017

Airbnb travelers in South Dakota will pay a little more starting Sept. 1.

The company behind the vacation rental website announced Thursday that it's reached an agreement with South Dakota to start collecting and remitting state and local taxes.

The taxes — 4.5 percent to the state and between 1 and 2 percent to local governments — will be billed when a room or home is booked.

The move is a win for officials in South Dakota, which doesn't have an income tax and depends on sales taxes to fund government. Sales tax revenue has been in decline in part from a shift to online spending where tax collection is less consistent.

Amazon reached an agreement to collect and remit taxes to the state in January.

Meanwhile, South Dakota is locked in a court battle over internet sales tax collections with Overstock.com and other online businesses. The state hopes the lawsuit will force the U.S. Supreme Court to overturn a 1992 ruling that online retailers have used to duck taxes outside their home states.

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