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. The statute carves out only single properties with repeated, uncorrected code violations or a top-tenth ranking for crime or disorder, nothing that would add up to a county count. A town or county may still require a zoning permit to run a short-term rental, which is how Asheville keeps its homestay roll, so long as the permit is not a registry in disguise. Buncombe County set its own work on rental rules aside after Helene. The best full-county number, around 5,400 in 2024, is an estimate a private company builds by scraping Airbnb and Vrbo from the outside, and the tourism authority said listings were down about a fifth through June 2025.

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. Buncombe has taken Airbnb's money since 2015, first under an agreement Airbnb made with the state that year and, since 2020, under the law. But the payment arrives blind. Asheville Watchdog reported the mechanics in 2023: under a confidential 2015 agreement with the state, Airbnb pays in a lump sum that does not name the properties. A UNC School of Government professor wrote in 2022 that some North Carolina tax collectors see every host's payment filed under one address, 888 Brannan Street, Airbnb's San Francisco headquarters. There is no public list of the county's 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. Pay the owner directly, off any platform, and the whole duty falls to the owner, on the honor system. Book through a local rental agency and the agency owes it.

So why does a nine-figure business run on the honor system? Not because anyone forgot to build the checks. The checks that would show who is renting 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 because state law, since 2020, makes the platform that takes the guest's payment responsible for it. The return the law asks for states only the month's total receipts, and, as Asheville Watchdog reported, Airbnb's confidential 2015 deal with the state lets it leave the properties unnamed. 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.

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 which rentals 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 books, the occupancy tax brought in about $34 million in the year from July 2023 through June 2024. Helene knocked it down to about $26 million the next year, 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 North Carolina's room-tax laws work. Asheville Watchdog reported in 2020 that the travel industry has long steered how North Carolina's room-tax money may be spent. The same report found neighboring states doing it differently: in Pigeon Forge, Tennessee, half the room tax went to the public schools, and in Charleston, South Carolina, half paid for tourism-related services such as downtown policing. 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 trash pickup, 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 split the rest evenly between the existing fund for tourism projects and a new pot called the LIFT fund, for projects that must both bring more business to lodging, meeting and convention facilities and benefit the community at large. Advocates tested it. In 2024 a housing group asked LIFT for $1.5 million to build apartments at a site called Star Point. Separately, more than two thousand people signed a petition asking the fund to pay for housing for service workers, arguing that it meets the fund's tourism test. The authority turned Star Point down in April 2024. It funded the trails and conservation land in a separate county project, Ferry Road, and cut that project's housing out. Its president declined to say whether the vote meant housing could not qualify. Earlier that month the lodging industry had warned that paying for housing 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 barred the tourism-related share of occupancy-tax money from paying for services a county ordinarily provides its residents, or for purposes designed for or mainly benefiting residents unless a local act explicitly allows it. It named affordable housing, directly, among those uses, 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. In May and June 2026 the city committed about $17.9 million from its federal disaster-recovery grant to three projects with 331 new affordable units. One of them is District East Commons, with 93 units. In August 2026 that project did not win the tax credits it needed from the state's housing finance agency before it could begin. Tourism money turned toward housing would help at the edges. It would not close a shortage that size 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 voted the other way in June 2026, 109 to 3 in the House and 46 to 1 in the Senate. Anyone who tells you the county can fix this on its own is pointing at the wrong building.