Airbnb finally agrees to pay its taxes in SF

Pub date March 31, 2014
SectionPolitics Blog

Airbnb has apparently finally agreed to pay its taxes in San Francisco. The San Francisco Chronicle is reporting that the company, long called out by Guardian articles and editorials as a tax scofflaw blatantly defying a city ruling, will start collecting and remitting the 15 percent transient occupancy tax by this summer.

Airbnb CEO Brian Chesky announced last week that it would start doing so in New York City, Portland, Ore. and other cities that take part in its vaguely defined Shared City program. That prompted us to send Chesky and other Airbnb executives an email on March 27 asking, “I’m wondering why you’re willing to collect and remit taxes in Portland, but you’ve been unwilling to do so in San Francisco, the city where you’re headquartered and where the city ruled more than two years ago that you should be doing so?”

They never responded to that inquiry, which is part of the company tactic of stonewalling the Guardian on an issue that we were the first to report over a year ago when we discovered the company was simply refusing to pay a tax bill that our reporting found amounted to nearly $2 million annually in late 2012, and probably significantly more now.

The San Francisco Tax Collector’s Office ruled in April 2012 that Airbnb should be paying the TOT on the thousands of local stays that it facilitates, and that the company and its individual hosts were jointly liable for that tax obligation. But because Airbnb’s business model violates local laws against short-term rentals, it was difficult for individual hosts to get the license they needed to collect and pay the tax.

What prompted Airbnb’s sudden change of heart? Were they feeling the pressure? The Chronicle article doesn’t really make that clear, but we’ll let you know what we hear.