The U.S. Virgin Islands and Airbnb recently reached a landmark agreement that will allow the popular service for apartment and room rentals to collect the  12.5 % Hotel Room Occupancy Tax on behalf of hosts. Airbnb will then remit those funds to the Territory’s Bureau of Internal Revenue.

The deal also establishes a framework by which Airbnb will help promote more tourism in the U.S. Virgin Islands, with particular attention paid to the Territory’s cultural and historical heritage.

This is not the first time Airbnb has invested in an agreement of this kind in the Caribbean. The company has been focused on creating a community in which homeowners can rent out their own properties to create additional options for tourists in the region.

Home sharing and renting have become major trends in the tourism industry thanks in large part to the explosion in popularity of services like Airbnb and HomeAway. With this agreement, the U.S. Virgin Islands can take in revenue more reliably, with hosts not having to worry about handling remittance transactions themselves. Governor Kenneth E. Mapp said the benefits of the agreement are far-reaching and would perhaps impact the hospitality sector most significantly.

All part of the plan

This latest agreement with Airbnb is just one component of the Mapp Administration’s five-year plan to provide economic stability to the government through increased revenue collection, better management of resources and the spurring of economic growth in as many areas and industries as possible.

There are currently about 2,000 active listings on Airbnb in the U.S. Virgin Islands. On average, a host in the Territory will earn about $7,700 a year. In almost every case, money earned through Airbnb is a supplemental income that helps families to pay their bills and improve their overall quality of life. The selling point for Airbnb users is that staying with a host gets them a more authentic and up-close view of the Territory, especially when it comes to recommendations for sites and restaurants to check out.

Local authorities in the U.S. Virgin Islands have made it clear that growth and diversification of tourism in the islands—along with the improvement of tax collection for hosts and the government—is top priority. This agreement helps to provide a boost for each of those areas.

For more information on how the USVI government’s commitment to tourism, especially related to this new Airbnb deal, could affect your company, work with a skilled business law attorney in the U.S. Virgin Islands.


Tom Bolt is Managing Attorney of BoltNagi, a respected and well-established business law firm serving clients throughout the U.S. Virgin Islands.