The Tax No One Can Count

The only real government count of short-term rentals here is the City of Asheville's permit roll. It reaches only the owner-occupied homestays inside the city, under a thousand of them. Everything else, the whole-house rentals and every listing out in the county, goes uncounted. Not by sloppiness. A 2022 court decision, Schroeder versus Wilmington, held that North Carolina forbids a local government from making rentals register at all. The best full-county number, around 5,400, is an estimate a private company builds by scraping Airbnb and Vrbo from the outside.

So how does the county tax rentals it cannot count? It does not. The websites do. Under state law, Airbnb and Vrbo add the 6 percent at checkout and remit it for their hosts, and Buncombe has taken Airbnb's money that way since 2015. But the payment arrives blind. Asheville Watchdog reported the mechanics in 2023: under a confidential 2015 agreement, Airbnb pays in a lump sum that does not name the properties, filed under one address, 888 Brannan Street, its San Francisco headquarters. There is no public list of the county's five thousand-plus rentals. Asked in 2026 how many occupancy-tax remitters it had audited in five fiscal years, the county answered: none. The county's books carry 374 active occupancy-tax accounts, counted on a single day in June 2026. One account can stand for hundreds of houses, because a platform remits for all of its hosts at once. Book a room off-platform and the whole duty falls to the owner, on the honor system.

So why does a nine-figure business run on the honor system? Not because anyone forgot to build the checks. The checks are illegal or bargained away. The registry that would let the county see who is renting is barred by the same state law that stops any North Carolina town from making rentals sign up. And Airbnb collects the tax only under that confidential 2015 deal, the one that lets it pay in a lump with no receipts inside. Nothing in the law forbids the county from auditing a remitter. It is simply never given the one thing an audit needs: the list of who is renting, and how often. The state's tax-secrecy law does leave one opening: a county may request an annual list of registered retailers. That window was cut for hotels. It was never widened for a platform paying on behalf of thousands of hosts it declines to name. The state kept the money and gave up the receipts. Asheville Watchdog has reported that the travel industry itself largely shapes North Carolina's room-tax law, which is part of why the rules leave so little for anyone to check.

So who is responsible for the tax on a Buncombe short-term rental? No one you can point to. The platform collects it but names nothing. The owner owes it but appears on no list. The county banks it, and could audit it, but has nothing to audit it against. The tourism authority spends it but never sees where it came from. The dollars are real. Whether all of them show up, no one can say, and the system was built so no one has to.

By the authority's own projections, the occupancy tax runs about $34 million in a normal year. Helene knocked it down to $22.8 million, and it is now climbing back. It does not enter the county's general fund. It goes to the Tourism Development Authority, the board that runs Explore Asheville. And state law fences it to one job: bring in more visitors. That is not a conspiracy against Asheville. It is how visitor taxes work across most tourism states, so the money guests pay is not pulled into the services that property and sales taxes already cover. Housing sits outside the fence by design. So does most of what tourism wears out. The tax can build things for visitors, a ballpark, a greenway, a venue, because those count as bringing more in. The water lines, the roads, the police and fire coverage all those visitors lean on do not count, and neither do schools. The fence runs between what serves tourists and what tourists use up.

There is one narrow opening. In 2022 the county's legislators cut the marketing share from three-quarters to two-thirds and set the rest aside for the community, part of it in a new pot called the LIFT fund. Advocates tested it. In 2024 a housing group asked LIFT for $1.5 million to build apartments at a site called Star Point, and more than two thousand people signed on, arguing that housing the workers who staff the hotels is tourism spending. The authority said no. It funded a greenway and cut the housing out, and its president would not even say whether housing could ever qualify, because the lodging industry had warned that paying for it could draw a lawsuit.

Then Raleigh closed even that opening, and the way it happened is worth knowing. In May 2026 the state Supreme Court sided with Currituck County on the coast, ruling a county could stretch room-tax money to cover public safety. The legislature answered within weeks: Senate Bill 484, a statewide law, and the governor signed it in June. It named affordable housing, directly, as something occupancy-tax money may not fund, alongside public safety, water, and schools. One of Asheville's own senators said it slams the door pretty hard. Vic Isley, who runs the tourism authority, put it flatter: Senate Bill 484 makes it very clear, she said, that you cannot use the occupancy tax for housing. Now the statute says so out loud.

Be plain about the size of it, too. Even if every dollar could go to housing, and it cannot, thirty-odd million a year is real money but not a cure. The region is short more than 34,000 homes over five years, and the city's own $8.4 million in 2026 paid toward about 205 units. Tourism money turned toward housing would help at the edges. It would not close a gap like that on its own.

So the slogan needs an edit. Tax the tourists is already done. The step that would actually move money is narrower, and it will not fit on a sign. The same law that bars housing leaves one door open: a local act, passed in Raleigh for Buncombe by name, can grant an exception. That is the one move that would work, and it runs uphill, because the legislature that would have to pass it just voted 109 to 3 the other way. Anyone who tells you the county can fix this on its own is pointing at the wrong building.