Airbnb now charged with collecting Suffolk County occupancy tax instead of hosts in new agreement

As the summer season settles in, this month marks the first time thousands of Airbnb hosts in Suffolk County no longer have to collect taxes on short-term rental stays thanks to a new deal that shifts that task onto the company.

The Voluntary Collection Agreement between Suffolk County and Airbnb is meant to streamline the process and ensure the county receives the money it's owed from a 5.5% occupancy tax paid by renters, officials said. The occupancy tax funds several initiatives that promote tourism throughout Suffolk.

Not all hosts have collected the occupancy tax previously, officials said, forcing the county to track down individuals.  

"This is a significant milestone and major achievement," Suffolk Comptroller John Kennedy said in an interview with Newsday.

A spokesperson for Airbnb told Newsday the process should be easier for hosts since they are no longer required to track tax collections. Suffolk is the 38th county in New York to enter into a similar agreement with Airbnb, according to the company.

The change comes as Suffolk collected a record of nearly $23 million from the occupancy tax in 2024, according to the county’s Finance and Taxation Division. The occupancy tax applies to hotels, motels, bed-and-breakfasts and short-term rental sites like Airbnb. The tax is levied in addition to the 8.75% sales tax, with revenue collected for the county and state. 

Revenue jumped 53% in 2023 compared to the prior year after the county nearly doubled the tax from 3% to 5.5%, Newsday previously reported. The Suffolk County Legislature approved the increased tax in April 2023. The occupancy tax has been in effect since 1992.

The Voluntary Collection Agreement has no cost to the county, according to a copy obtained via the Freedom of Information Law.

The county no longer uses Granicus, an international government software provider, it hired in 2023 to track down homes rented on sites like Airbnb so the county could notify the property owners about the occupancy tax if they weren't collecting it. The service came with an annual fee of $269,000.

Kennedy said it was too early to estimate how much additional revenue the change will bring. He said his office should have a clearer indication after a period of 90-120 days. The contract did not require legislature approval, Kennedy said, since it’s for revenue collection as opposed to an expenditure.

"This collaboration should definitely be a beneficial one and bring in more revenue under the hotel-motel process," he said.

Airbnb will send payments to the county on a quarterly basis, a spokesperson for the San Francisco-based company said.

Airbnb automatically sets the tax on transactions after the contract went into effect, the spokesperson said. Previously, the host had to turn on a tool that set the tax and then track the amount collected to send to the county.

While both sides say the contract is beneficial, it was "an interesting process" to reach the agreement, Kennedy said. He said Airbnb had been unwilling to meet the county's terms when discussions first started years ago.

Part of the holdup centered on the time period in which the county could audit Airbnb for the occupancy tax, Kennedy said.

Negotiations are underway with Expedia Group, which operates Vrbo, for a similar agreement, Kennedy said.

Airbnb in a news release earlier this year said tourism taxes it collected in the United States generated over $2.4 billion in 2024, of which New York accounted for $16 million.

How the county disperses money collected through the tax is defined in the county code. The largest sum of $6 million goes to a designated nonprofit tourism promotion agency, which is currently Discover Long Island.

Mitch Pally, interim president and CEO of Discover Long Island, said the nonprofit is reimbursed for its marketing dollars through the occupancy tax.

"It attracts people here, it supports businesses here," he said. "We look at it as an economic development investment for the county."

By Joe Werkmeister

joe.werkmeister@newsday.com

Joe Werkmeister joined Newsday in 2022 and covers Suffolk County government and politics. He is a graduate of St. Bonaventure University and previously worked as the editor of two North Fork community newspapers.

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