In 2008, Airbnb transformed the short-term rental (STR) market by allowing hosts to engage directly with guests seeking short-term lodging. Today, estimates of the global STR market range from $71 billion (USD) to $107 billion.
The STR market poses many challenges to state and local governments. For tax authorities, the rapid growth of an industry that has historically had a culture of tax evasion is concerning.
At IVIX, we build technology that helps tax authorities gain visibility into the shadow economy. We recently analyzed the state of tax compliance in the United States STR market. We learned that there is significant potential for federal, state, and local tax authorities to increase revenue by focusing on short-term rentals.
But the popularity of short-term rentals varies widely. Which states could see the most return on investment by focusing their limited audit resources on the STR industry? In this blog post, we’ll share the state-level trends we discovered about the STR market in different US states.
To assess the size of the STR market in different states, we analyzed anonymized data on millions of public hosts’ profiles on the leading STR platforms.
Some of our findings were obvious: for example, the three states with the highest STR revenue are California, Florida, and New York. Others were more surprising, and may prompt tax authorities to reassess their compliance priorities.
Here are the top 10 states by STR revenue, along with the number of listings and hosts:
The popularity of short-term rentals varies widely between states — and it isn’t just about population. For example, North Carolina — number 7 on our list of states by STR revenue — has 32,000 listings and a population of 10 million. But Ohio, with a slightly larger population of 11.8 million, has only 9,000 listings.
Here are the top 10 states with the highest proportion of listings to population:
Are you interested in learning more about the STR market in your state? Tax authorities around the world are using IVIX to ensure that STR businesses comply with the tax code. To learn how our platform can help you, click here to book a demo.