Connecticut first state for which Airbnb will remit tax

Airbnb Inc., the short-term rental business, agreed to collect hotel taxes on behalf of Connecticut home owners who rent their properties through Airbnb.

That will make Connecticut the first state where Airbnb will withhold a hotel tax on behalf of people who rent their homes to its customers. Airbnb will remit the tax revenue to the state government, which has a 15 percent hotel tax rate.

The Airbnb tax-withholding practice is scheduled to start July 1.

The  government of Connecticut had administrative authority to work out a tax-withholding agreement Airbnb, so no enabling legislation was needed.

Connecticut home owners who have rented to Airbnb customers have been responsible for paying hotel tax to the state themselves.

About 1,800 home owners in Connecticut list their properties for short-term rental through Airbnb, and about 54,000 customers of Airbnb rented Connecticut homes in the year ended June 1. [Wall Street Journal] — Mike Seemuth