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Summary:

Airbnb’s “sharing economy” business, which lets people rent out their homes for short times, is starting to resemble the traditional economy in a number of ways.

A photo taken with the Phantom 2 Vision above San Francisco's North Beach district. Photo by Signe Brewster
photo: Signe Brewster

Airbnb insists it’s not in the hotel business, but that won’t stop it from collecting hotel tax. In a ground-breaking announcement, the company on Monday declared it will begin collecting taxes on behalf of its hosts in San Francisco and Portland.

The new policy could help Airbnb make peace with city officials, many of whom are hostile to its “sharing economy” business model. The tax policy will also let Airbnb’s network of hosts, who rent out their homes for short periods of time, gain firm legal footing.

Airbnb announced its tax plans in a company blog post, stating that it didn’t agree with the tax laws, but that “we want to help our hosts follow the rules. It’s good for the government officials who won’t have to identify hosts and collect the taxes themselves: we’ll do the work for them.”

Airbnb says it’s working on operational details but, in practice, the news means Airbnb is poised to begin collecting San Francisco’s 14% hotel tax this summer. The blog post also notes that Airbnb, which may be planning an IPO later this year, is also starting tax collection in Portland.

Meanwhile, the company is still in a regulatory tangle in New York, where the state’s attorney general issued a subpoena last year demanding the identity of its 15,000 or so New York-area hosts. Airbnb is fighting the subpoena in court but, as the Wall Street Journal reported last week, the lawsuit may be on ice as the sides try to reach an agreement.

Last fall, Airbnb offered New York an olive branch of sorts by proposing occupancy taxes and a hotline system to report bad guests. More recently, the Journal reports the company is trying a new tack by telling new mayor Bill de Blasio that taxes from Airbnb could raise $21 million for the city’s homeless shelter.

More broadly, the tax discussions show how the lofty language of the “sharing economy,” often employed by companies like Airbnb and Uber, is starting to meld with the more traditional economy.

  1. Since it’s illegal to rent short-term in San Francisco, will the City crack down on landlords using these tax submissions, or will AirBNB obfuscate the landlord’s indentifiable information?

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    1. I think it’s going to be a special case. These are too many landlords we are speaking of. And about the article – I’ve heard that NYC already settled and AirBNB will have to pay taxes. I wonder if that’s going to increase the prices… They are already pretty close to the rates of some cheap hotels, for example the ones on http://new-york.hotelscheap.org/ and I’d prefer almost always to stay at a hotel than at somebody’s living room.

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