Airbnb makes small admission on tax issue, saying its hosts should pay

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Airbnb creates pages for each major San Francisco neighborhood, but it won't charge guests the taxes they owe.

Under pressure in San Francisco and New York City for violating local tenant and land use laws and refusing to pay local taxes, Airbnb has finally acknowledged that transient occupany taxes apply to the room rentals it facilitates. But the company still hasn’t taken any public steps to collect the tax, nor has it admitted that it shares this tax debt with its hosts.

“Our hosts are not hotels, but we believe that it makes sense for our community to pay occupancy tax, with limited exemptions for those who earn under certain thresholds,” CEO Brian Chesky wrote on the Airbnb blog yesterday, addressing the post to New York City and not San Francisco, where it is headquartered and where we have shown the company is shirking an annual tax debt of nearly $2 million.

Contacted by the Guardian, a company spokesperson extended the pledge to San Francisco, writing, "Yesterday, our CEO Brian Chesky announced that we believe it makes sense for our community of hosts to pay occupancy tax to the cities in which they live, with exceptions under certain thresholds, and we are eager to discuss how this might be made possible. We have been in substantive discussions with Board President David Chiu on these issues for some time, and we’d like to thank him for the open dialogue that helped lead to today’s announcement. We look forward to continuing our work with him and others in San Francisco to set forth clear, fair laws that allow regular people to rent out their own homes, while giving back to the city that makes it possible."

As the Guardian has repeatedly reported, most recently in our Aug. 6 cover story “Into Thin Air,” the San Francisco Treasurer/Tax Collectors Office has ruled that the city’s TOT of about 15 percent applies to Airbnb guests, and that Airbnb shares that joint tax liability with its hosts.

The ability of individual hosts to receive business licenses for renting out rooms and to collect and remit the TOT is complicated by the fact that such rentals violate land use, tenant, and other city laws -- and Chiu has been developing legislation that would legalize and regulate the stays.

Airbnb could easily collect the TOT on each San Francisco transaction, as some of its online competitors have already been doing, but it has so far refused to do so. And when the Guardian asked Airbnb whether it now plans to do so, the company ignored the question.

In fact, Airbnb’s public statements and private communications indicate its intention to pass the buck to its hosts rather than collect and pay the taxes itself, and several hosts who commented on Chesky’s blog post expressed hopes they would get more support from the company on the myriad issues that complicate its simplistic business model.

Nonetheless, Chiu took the Airbnb’s statement yesterday as a positive sign, telling us, “I am pleased to hear that Airbnb has acknowledged the need for their users to pay the occupancy tax. This policy was developed as a result of discussions that I’ve led in the past year to regulate and tax shareable housing activity in San Francisco. While we continue to negotiate with shareable housing companies, housing advocates, and the Mayor’s Office to find sensible solutions, I am confident that we will be able to move forward on a regulatory framework that provides flexibility to residents, protects our affordable housing stock and collects the fair share of taxes for the City. I look forward to introducing legislation in the coming months.”

 

Comments

AirBnB admits that their hosts owe the hotel tax even though, as they note, the hosts are not hotels.

But it seems reasonable that they should not have to do the Tax Collectors work for them.

So I suspect the details will probably require some type of measure to help with collection. Perhaps the contract between AirBnB and the Host will make explicit that the host owes the tax. And/or AirBnB will, upon request, supply details of the activity for a given host, in much the same way as employers provide W-2's and banks do 1099's.

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AirBNB is never going to pay the tax, Steven is just confused.

What Airbnb will most likely do is to add a tax recovery charge based on parameters supplied by the host, which is exactly what Expedia, Orbitz, Priceline and the rest do. Then that money is passed to the host and, hopefully, they use it to pay the TOT tax.

If you go to craigslist, under 'San Francisco vacation rentals' you'll see hundreds of listings where people can stay for a few days instead of a hotel. Nothing is in the works to get the TOT on those rentals. AirBNB rocks!

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Posted by Guest on Oct. 06, 2013 @ 5:09 pm

Taxes are the price we pay for living in civil society, something that only the reactionary right-wingers don't understand. Most of us don't want to live according to the law of jungle, where the strong are free to exploit the weak. And even libertarian heroes like Adam Smith understood that the rich (including billion-dollar corporations and their billionaire investors) should pay more in taxes because they have more. Frankly, I think Airbnb hosts should be offended that this wealthy company and its venture capitalists are throwing them under the bus in order to avoid their tax obligation and the simple task of collecting this tax from guests.  

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But Steven, you never met a tax you didn't like, that you didn't want to introduce, raise rates on, or enforce more aggressively.

Taxes are a necessary evil but not an endless gravy train.

Anyway, in this case, the taxes will be paid anyway, by the hosts who are the ones who are really profiting from these short-term lets. AirBnB is merely a broker and their fee for that is less than the tax you want to apply.

Do you support a tax audit for every tenant who makes money by illegally sub-letting his rented unit thru AirBnB? If not, why not?

Posted by Guest on Oct. 07, 2013 @ 10:40 am

To him the social contract is a unilateral type thing.

Those with more should be taxed more in all sorts of new ways and pay more on all of the old ways. The social contract runs one way, if you are a complete fuck up and have no interest in changing you don't need to, but the social contract needs to enable your fucked up status.

If you have read Steve for a while he has various entitlement issues, other than his bike entitlement racings, Steve gets all worked up if car owners want the status quo, he foams at the mouth if bike riders don't get free shit.

Steve gets irate when non-progressives have an opinion on general legislation and where tax money should go. The city throws money away on an endless string of idiocy and can provide basic services so the progressive "mind" wants to create new taxes on business to pay for MUNI, if you think this is a bad idea Steve will go into hysterics about race and class.

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Posted by troll barrier on Oct. 07, 2013 @ 6:28 pm

"But Steven, you never met a tax you didn't like, that you didn't want to introduce, raise rates on, or enforce more aggressively."

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Posted by Reality barrier! on Oct. 08, 2013 @ 7:03 am

Actually, that isn't true, I thought Black Rock City LLC should have just paid the higher fees that Pershing County was requesting rather than suing. The fees were a relative pittance for a $25 million company. As for the original point, when wealthy individuals and corporations return to paying their fair share for our collective needs -- going back to the tax rates of the '50s or '60s, for example -- then we should all be just fine. The problem is that greedy conservatives have slashed those rates, not that those on the left want ever-more tax revenue, which is an intentionally misleading accusation.  

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of the 50's and 60's. It was blue-collar so-called Reagan Democrats who voted for a revolution in taxation.

Nor was that particularly an American thing anyway - almost every Western nation reduced taxes from the punitive rates of 50 years ago. Those that did not, could not compete.

Drop the pipe dreams and focus on the real world. Even Obama preserved the Bush tax cuts almost in their entirety. Your ship has sailed.

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