🎯 STRisker: Bulletin - Washington

A Deep Dive into Your Area’s STR Updates—Helping You Navigate the Ever-Changing Rental Landscape.

Short-Term Rental Tax Proposal Hits a Dead End— For Now

A proposed tax on short-term rentals in Washington state has failed to move forward this legislative session, but it’s not the last we’ll hear of it.

Senate Bill 5576 which aimed to allow local governments to impose a 4% tax on short-term rental properties like those listed on Airbnb and Vrbo, didn’t make it to a vote by the April 16 cutoff. However, supporters of the bill including Sen. Liz Lovelett are already setting their sights on next year’s session.

The bill was designed to address two pressing issues: the growth of short-term rentals and the affordability crisis in popular vacation destinations. Communities in Washington like the San Juan Islands are struggling with housing shortages as locals are priced out by the high demand for vacation rentals. By imposing a tax on short-term rentals, proponents hoped to funnel the funds into affordable housing initiatives.

However, Airbnb and its supporters pushed back hard against the bill. Airbnb spent millions lobbying against the tax arguing that it would create an unfair burden for local hosts who depend on the income to make ends meet. Critics also pointed out that the tax might not generate enough revenue to address the state’s housing issues meaningfully.

In response to these concerns, the bill was amended to make the tax optional for local governments rather than applying it statewide. This change was seen as a win for some stakeholders like Vrbo, which supported the proposal as a “reasonable” option for local governments. Despite opposition from Airbnb which criticized the tax as excessive, Vrbo emphasized the importance of having a local tax option to avoid more extreme measures such as outright bans on short-term rentals.

While the bill is now dead for the session, supporters remain optimistic that it could gain traction in the future. Lawmakers are hoping that increased understanding of the issues and the support of key players like Vrbo will help move the proposal forward next year.

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