Like a repeat visitor, a bill to tax short-term rental bookings is back in front of the Washington State Legislature — and drawing renewed resistance from vacation rental giant Airbnb.

Senate Bill 5576 would allow counties, cities and towns to impose a tax of up to 4% on short-term rentals used by vacation guests on platforms such as Airbnb and Vrbo. The bill failed to advance during the 2025 session.

The aim of the bill — and companion House Bill 1763 — is to address a shortage of funding for housing, especially in cities and towns where short-term rentals have had an impact on the availability of affordable properties for people who live and work in tourist-heavy locales.

“We are absolutely going to pursue the policy again this session to create critical new revenue streams for cities and counties struggling with our housing crisis,” Sen. Liz Lovelett (D-Anacortes), the prime sponsor for the bill, told GeekWire. “This remains a smart approach to ensure that more resources are available to build workforce housing across the state, especially in areas where seasonal tourism drives up demand for vacation homes and reduces the availability of long-term rentals.”

This is the eighth year that Lovelett has sponsored a short-term rental tax proposal. Last session she estimated that the state could use hundreds of thousands, if not a million, new housing units over the next 20 years, and that somewhere near 35,000 units are wrapped up as short-term rentals.

Last year’s bill made it out of the Senate but was not called forward for a vote on the House floor prior to the April 16 cutoff.

San Francisco-based Airbnb pushed back on the legislation last year and is back to do the same this session. The company’s political action committee in Washington, called Airbnb Helps Our State Thrive (HOST) PAC, advocates for residents and communities who rely on home sharing and would be negatively impacted by a new tax. A companion website urges Washingtonians to “say no to the vacation tax.”

“SB5576 and HB1763 will make it more expensive for Washington families to travel within the state, while failing to meaningfully address local housing affordability challenges,” Airbnb Public Policy Manager Jordan Mitchell said in a statement to GeekWire. “The proposals target residents who share their homes to earn supplemental income, giving large hotel chains the upper hand.”

Mitchell said Airbnb supports efforts to improve housing affordability in Washington state, but the tax legislation misses the mark and data-backed policies are needed to bolster affordable housing supply. He referenced Senate Bill 6026, which aims to allow and encourage residential development in commercial and mixed-use zones.

Vrbo, owned by Seattle-based travel giant Expedia Group, views the bill as a better alternative than an outright ban on short-term rentals.

“We support SB 5576 and see the measure as a helpful affordable housing tool and an important pressure release valve for communities who might otherwise pursue more punitive and harmful measures such as an outright ban on the activity,” Richard de Sam Lazaro, Expedia Group’s head of government affairs for North America, said in a statement to GeekWire.

Some cities across Washington have already enacted their own restrictions or regulations. The Seattle City Council approved taxes back in 2017 and the city requires licensing for hosts to operate. In other states, far harsher restrictions have been implemented, including an outright ban on short-term rentals in New York City. 

Airbnb says its Washington hosts play an important role in strengthening the state’s tourism economy.

In 2024, short-term rentals in Washington helped generate approximately $4.7 billion in economic activity for the state and supported over 35,000 local jobs, according to a study from The Association of Washington Businesses and local economic consultant CAI.

Short-term rentals and visitor spending contributed more than $300 million in state and local fiscal revenues in Washington in 2024, according to the report.

Michael Lucarelli is looking for Seattle food recommendations — after relocating to the city earlier this year and moving his company with him.

RentSpree, which got its start in Los Angeles but is now headquartered in downtown Seattle, has built a profitable business helping landlords and real estate agents screen tenants, collect rent, sign leases, and manage rentals online.

The company, founded in 2016, serves more than 4 million users and is growing without relying heavily on paid advertising, said Lucarelli, CEO and co-founder of RentSpree.

Lucarelli, a former real estate agent, said Seattle stood out because of its concentration of real estate and proptech companies such as Zillow, Redfin, and Opendoor. The company this month hired former Redfin exec Alex Berezhnyy as chief technology officer, further anchoring its presence in the region, where more than half of the executive team is now based. It has more than 30 employees in Seattle.

“Seattle is really great for talent that balances both an aggressive growth perspective, but also building sustainable companies over time,” Lucarelli said.

RentSpree targets “DIY” landlords, typically individuals who own one to four rental units and still rely on paper applications and manual rent collection. The company’s software helps them manage the entire rental process online, from applications and leases to monthly payments.

While landlords and real estate agents are RentSpree’s core users, the company makes most of its money from renters, who pay application fees and small convenience fees for rent payments. That model has helped fuel its payments business, which is now growing about 150% year-over-year and processing hundreds of millions of dollars annually.

RentSpree also recently launched a banking-as-a-service offering that lets landlords open bank accounts through the platform, earn interest, and track expenses — pushing the company further into fintech territory.

The company’s real advantage is it’s distribution, Lucarelli said. Instead of relying on digital ads, RentSpree partners with MLS systems, Realtor associations, and real estate software platforms to reach landlords where they already work.

More than 10,000 landlords and agents use RentSpree each month. The company has rolled out new AI features to help streamline filling out forms and listing properties.

“We’re focusing on the important jobs that they’re trying to accomplish, or things that they’re doing already — and how we can make it vastly easier by utilizing AI for them,” Lucarelli said.

The company has raised $28 million to date and employs 135 people across the company in the U.S. and Thailand.