Philly Is Getting an 8.5% Airbnb Tax

City Council passed the new tax today. Mayor Michael Nutter is expected to sign it into law.

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Airbnb is about to get a lot less laissez-faire in Philadelphia.

City Council passed a bill, 15-0, Thursday, which is expected to be signed into law by Mayor Michael Nutter, that will force anyone who rents out their home on Airbnb or similar websites to pay Philly’s 8.5 percent hotel tax. That’s just the first new rule that will go into effect under the legislation: Hosts who rent out their homes for more than 90 days will have to get a rental license, and no one will able to rent out their homes for more than 180 days annually.

Currently, many people who use Airbnb in Philadelphia are technically part of the city’s black market, since short-term rentals are not permitted in residential areas. This new bill will legalize the industry.

Depending on how you see it, the fact that Airbnb has operated outside of the confines of government restrictions is either a good or bad thing. The Greater Philadelphia Hotel Association argues that not taxing or regulating Airbnb gives it an unfair advantage, while hosts who rent out their rooms say that they are nothing like a full-staffed hotel operation and are just trying to put a little extra money in their pockets.

When Councilman Bill Greenlee proposed the Airbnb tax on behalf of Nutter in May, he said that demand for rentals would “hit the roof” when Pope Francis visits Philadelphia in September. So, this is also seen by some as a money grab by the city.

A spokesman for Mayor Michael Nutter said the city does not have an estimate on how much revenue will be collected from the bill.

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