Airbnb will finally begin paying a fair share of taxes on its listings in B.C.

Today (February 7), Finance Minister Carole James said the government had reached a deal with the San Francisco-based company to see it collect an eight-percent provincial-sales tax on all transactions it records in B.C. plus a three-percent hotel tax.

Revenue collected via Airbnb will go towards housing, she added.

"British Columbians want access to the sharing economy - and they want it to be fair," James said quoted in a media release. "This initiative will provide additional revenues to address housing affordability, and it improves tax fairness for all British Columbians."

More specifically, the eight-percent sales tax will count towards the province's general revenue and then be used for affordable housing. Money raised via the three-percent hotel tax will be used to promote tourism and related activities.

At a press conference, James said that if the tax had applied to Airbnb listings in 2017, the province would have collected an estimated $16 million.

Airbnb Canada’s public-policy manager, Alex Dagg, is quoted in the release expressing support for the agreement on behalf of the company.

"This is a defining moment for Airbnb in British Columbia," he said quoted there. "These changes are a welcome opportunity to continue helping the province and its residents benefit from the positive economic impacts of home sharing."

The City of Vancouver made peace with Airbnb last November when council voted to legalize and regulate short-term rentals (STR), of which Airbnb is one of many middlemen active in the market.

The framework includes restrictions on how residents can use these digital services to rent a portion or all of their home to travellers. It also requires people who want to rent out all or a portion of their primary residence—a spare bedroom, for example, or all of their home while they’re out of town for a weekend—to acquire a new class of business license. These will cost $49 a year plus a one-time administration fee of $54.

Each business license will come with a unique number, and that number will have to be displayed in online listings. If authorities find a Vancouver listing on a service such as Airbnb that fails to include a license number, the person responsible for that listing can be fined $1,000.

Today’s B.C.-government release states the province will now work on making similar tax arrangements with Airbnb competitors.