The recent spate of state and local tax regulations aimed at the lodging industry has short-term rental (STR) owners grappling with the complexities of compliance. While many are using existing staff and resources to manually sort out and pay what is owed, innovative technology solutions are becoming more readily available. Many cities have set their tax sights on the growing STR segment, which is now estimated to account for about 27% of the U.S. lodging industry. According to a 2022 survey by the National League of Cities, 82% of cities surveyed require STR hosts to remit taxes directly to the city. Only 5% of the survey respondents require the online platform to collect and remit local taxes on behalf of the hosts. According to PwC, over the past few years artificial intelligence (AI) is increasingly being used by businesses to manage tax operations by streamlining processes, reducing errors, and providing real-time insights into tax compliance. Municipalities, ever on the outlook for additional sources of revenue, are now looking at these AI solutions to flag non-compliance of local taxes on STRs in order to facilitate collection of taxes and any outstanding fines.