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County contract led Airbnb to collect Hudson City lodging tax; city seeks refund, clarification
Summary
Finance staff told the Hudson City Finance Committee that Columbia County’s agreement with Airbnb led the platform to collect a 5% lodging tax on short-term rentals inside Hudson City. City staff said the county will renegotiate to exclude the city and staff are investigating how to stop collections and return improperly collected funds.
Hudson City finance staff told the Finance Committee that Columbia County’s contract with Airbnb did not exclude the city, and as a result Airbnb began collecting the county’s 5% lodging tax from short-term rental operators inside Hudson City. The issue first surfaced during the committee’s routine budget report and prompted questions about who should hold or return funds collected in error.
Staff member (finance) said Columbia County provided Airbnb a geographic "shape file" intended to allow Airbnb to exclude Hudson City properties, but the exclusion had not been applied as of recent weeks. According to staff, Airbnb told the city it was "still working on it" and that the county and Airbnb would revise their agreement so Hudson City operators would be excluded.
Committee members pressed staff on the practical consequences: how the city would stop further incorrect collections and how money already collected would be handled. Staff said they do not currently have the data on how many units or rental days were taxed and warned that determining refunds would require a detailed review. "How does that money get returned to the STR operators and how do the STR operators return it to the people that paid it?" staff asked during the meeting. The staff member also said the city has no current estimate of total dollars collected under the erroneous charge.
On the question of who should retain incorrectly collected taxes, the staff member told the committee: "I would argue if it's taxes on city property, even if they're legal taxes, it should come to the city. County shouldn't get to keep it because they don't have the authority to." Committee members and staff agreed further coordination is needed between Hudson City, Columbia County and Airbnb to stop the collections and determine a refund path.
The committee asked staff to follow up with Columbia County and Airbnb, obtain the detailed transaction data, and report back with options for stopping further collections and for returning improperly collected amounts to either operators or the city, depending on legal authority and data availability. The committee did not take a formal vote during the meeting.
Next steps: staff will consult with Columbia County officials and the county treasurer’s office, obtain the transaction data from Airbnb or the county’s processor, and return to the committee with a status update and proposed next steps.
