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Airbnb and taxation: Developing a seasonal tax system

Author

Listed:
  • Sara Dalir

    (111996Sheffield Hallam University Business School, UK)

  • Abror Mahamadaminov

    (35006Sejong University, South Korea)

  • Hossein GT Olya

    (34467Sheffield University Management School, UK)

Abstract

This study applies tax planning theory to develop a seasonal tax strategy as an alternative to a fixed tax rate for shared lodging platforms such as Airbnb, to increase hosts’ revenue and to address seasonality in tourism. The annual revenue of the various types of accommodation is used to calculate a seasonality index by the moving average method, which is incorporated as a corrected coefficient in a seasonal tax formula. The sample includes data from 1258 active Airbnb listings in Boston, Massachusetts. Using a mean comparison test, this study reveals that the application of a seasonal tax strategy significantly increases the revenue of Airbnb hosts compared to a fixed tax rate system. Drawing on the flexibility tenet of tax planning theory, policymakers can use the proposed seasonal tax strategy as an instrument to revisit the taxation system for sharing economy businesses based on changes to the socio-economic, environmental and political conditions. Implications for all stakeholders are discussed.

Suggested Citation

  • Sara Dalir & Abror Mahamadaminov & Hossein GT Olya, 2021. "Airbnb and taxation: Developing a seasonal tax system," Tourism Economics, , vol. 27(2), pages 365-378, March.
    • Handle: RePEc:sae:toueco:v:27:y:2021:i:2:p:365-378
    DOI: 10.1177/1354816620904894
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    References listed on IDEAS

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    2. Jorge Tello‐Gamarra & Carlai Netto, 2022. "The sharing economy in social media: An institutional analysis in an emerging country," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 988-999, June.

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