Butler County code altered to reflect state law on bed tax

February 8, 2019 Cranberry Local News

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The Butler County Commissioners will tweak the county bed tax rules to make way for state legislation that forces booking agents and online travel companies to pay the same taxes as hotels, bed and breakfasts and cabins.

Diane Marburger, county treasurer, told the commissioners at their Wednesday meeting that the county’s 5 percent hotel tax, known as the bed tax, has not been paid by online booking websites, such as Orbitz, and such travel booking sites as HomeAway, where travelers can book a room or apartment owned by a private citizen.

She said the travel site Airbnb.com. volunteered in 2016 to pay the tax.

Marburger said that, in 2018, Airbnb paid between $900 and $1,500 per month in bed taxes to the county.

She said of the total bed taxes collected, the county Tourism and Convention Bureau receives 96 percent, while the county gets 4 percent.

State Act 109, which took effect on Jan. 22, requires booking sites and online travel sites to pay the full bed tax as well.

Marburger said that language in the county’s tax code should be arranged to reflect the new state legislation. The commissioners agreed and voted to eliminate the outdated language.

Jack Cohen, the tourism bureau president, explained that when hotels find themselves with excess rooms, booking sites buy them at a discounted rate.

They then tax at the discounted rate, instead of the higher rate they charge for the rooms, and keep the difference.

Cohen said $28 million per year has been lost statewide through this practice.

He estimated the county has lost about $100,000 per year that will now be captured, due to Act 109.

Cohen said the state will collect the money from the sites and disburse it to the counties.

The additional funds generated by Act 109 will be helpful to the tourism bureau in pursuing its mission.

“It’s going to allow us to tell more people about our great community and that’s exactly why we want those dollars,” Cohen said.

Leslie Osche, commissioners chairwoman, said the additional cost to booking and online travel sites will likely be passed on to customers.

“We used (an online rental) in California, and we had to have cash in hand for the tax when we got there,” she said.

Marburger said she is waiting to hear back from Airbnb to notify it that the tax is now mandatory.

She said Cranberry Township manager Jerry Andree told her a significant number of residents there are renting rooms on online travel sites, which can disrupt neighborhoods and affect hotels.

Marburger said the state has not yet taken action to enforce the new act, but Commissioner Kim Geyer said legislators in Harrisburg are faced with 47 new pieces of legislation.

Geyer said the delay might be a result of legislators educating themselves on the plethora of new laws.

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