Moline eyes extra tax revenue from Airbnbs, local host fears impact

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Moline could become the first of the Quad Cities to start taxing its Airbnbs, but one local host worries it would send his guests booking rooms somewhere else.

Hotels and motels pay a 7 percent tax to the city. Last year, it generated about $1.7 million for the city. 

Moline’s Finance Director Kathy Carr estimates adding tax dollars from Airbnbs and other apartment rental sites could bring in thousands of dollars. That’s based off of looking at the hotel/motel tax in Rockford Illinois. About 1.5 percent of the city’s hotel/motel tax revenue comes from Airbnb. 

Carr says if Moline matches that percentage, it would generate about $30,000 annually. 

However, Moline resident and Airbnb host Josh Downey fears the tax would leave his upstairs apartment vacant. 

“It would be devastating,” he said. 

He started renting it out last July. Now it’s booked an average of 25 nights per month. Downey said it brings in about $1,000 of extra income per month.

“It’s huge. It’s helped me to stay afloat,” Downey said.

With the tax, he would be out $70 a month.

“I’ll have to raise the rates or I’ll just make less money I guess,” Downey said. “You can only tax so much and then people are going to look around to other options. If it’s not affordable or a good value, then they’ll just stay at a hotel.”

Carr said the tax would level the playing field because the hotels already pay it. 

She estimates there are about 10-15 Airbnbs in the city.

“They’re not going to create that much revenue if there’s only a few people doing it,” Downey said. “Is it worth it to them?”

Carr said the revenue from taxes would be a small drop in their $140 million budget. But with sales tax revenue down and extra expenses from a harsh winter, Carr said the city needs all the money it can get. 

Downey says, so can he. That’s why he wants the council to say no to the tax. 

“I feel like it’s going to happen anyway,” he said. “I wish it wouldn’t.”  

Carr said she’s been speaking to other city’s who started taxing their Airbnbs and says they didn’t see a decline in the hosts.

City council will take their first look at the tax next Tuesday.

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