Online Accommodation Platforms to Charge Taxes

Posted: September 24, 2018

Other District News Stories

Online Accommodation Platforms and Properties with Fewer than 4 Units are Now Required to Charge PST and MRDT

TOFINO B.C. – At the beginning of 2018, the BC Government announced that online accommodation booking platforms, including Airbnb.com, and accommodation properties with fewer than 4 units, will be required to charge both the 8% Provincial Sales Tax and 3% Municipal and Regional District Tax (MRDT) on purchases of accommodation.

The government also announced that the eligible uses of MRDT revenues collected from online platforms would be expanded to include affordable housing initiatives, should the designated recipient (the District of Tofino) decide to use the funds in this manner.

In keeping with these announcements, the revised MRDT Program Requirements include the following key changes:

  1. As of present, Airbnb has agreed to collect MRDT.  The goal of the Province is to have all remaining major platforms agree to also collect MRDT by October 1, 2018; this includes VRBO, FlipKey and others.   This applies to all Airbnb-listed properties that earn more than $2,500 annually.
  2. Starting October 1, 2018, all accommodation properties, including properties with less than 4 units, are required to register to collect PST and MRDT if their gross revenues exceeded $2,500 over the previous 12 months, or if gross revenues over the next 12 months is reasonably estimated to exceed $2,500.
  3. The MRDT renewal process and the requirement to demonstrate accommodation provider support will remain unchanged. Only properties with 4 or more units will be eligible to vote to continue collecting the MRDT.
  4. The MRDT collected by online booking platforms can be used for affordable housing initiatives, should the Designated recipient (District of Tofino) decide to use it for this purpose.
  5. General MRDT revenues (revenues from traditional accommodation providers such as resorts, hotels, motels, B&B’s, etc.) cannot be used for affordable housing initiatives unless the designated recipient submits a complete application demonstrating the support of tourism accommodation providers. This would require a renewal process vote. Should this vote take place, this support would need to be demonstrated by at least 51% of the eligible properties AND 51% of the total unit count of those properties.

Quotes from Mayor Josie Osborne & Shane Richards, Vice-Chair of Tourism Tofino’s Board of Directors:

“The District of Tofino intends to apply to the Province to use MRDT collected through Online Accommodation Providers to support affordable housing initiatives on municipally-owned land at District Lot 114 and on Sharp Rd,” said Mayor Josie Osborne. “This is a welcomed opportunity to invest revenues from the tourism industry directly back into the infrastructure we need to support our community.”

Shane Richards, Vice-Chair of Tourism Tofino’s Board of Directors, expresses “Our Board of Directors supports the District of Tofino’s intention to utilize the MRDT generated by online platform bookings for initiatives that increase the quantity of housing available in Tofino.  This is a unique and very positive example of the tourism industry contributing directly to local solutions.”

Links:

For further information on these changes and exemptions, as well as information on how to register to collect PST and MRDT, please visit this link

Please refer to the MRTD FAQs on the Destination British Columbia website, updated with information related to using MRDT revenues for affordable housing.

Media Contacts:

Josie Osborne - Mayor, District of Tofino
250-725-3229

Shane Richards - Vice - Chair, Tourism Tofino
250-726-6629

 

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