Airbnb isn't sharing - Page 2

Visitors to San Francisco aren't paying the required hotel tax on "shared housing."

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Airbnb has detailed sections on San Francisco and its neighborhoods, none of which mention their customers' tax obligations.
WWW.AIRBNB.COM/LOCATIONS/SAN-FRANCISCO

Lee, who toured Airbnb's huge new headquarters space at 888 Brannan with CEO Brian Chesky on March 4, had no comment directly on whether the company was paying — or should be paying — its hotel taxes. Spokesman Francis Tsang would only say: "The Mayor supports the emerging sharing economy and efforts to support it within appropriate regulation to ensure public safety. The Mayor also believes that laws and regulations should occasionally be reviewed for continued effectiveness and application in light of changing technologies and economic/cultural trends."

San Francisco and other California cities have been battling Internet-based companies over the collection of hotel taxes for years. San Francisco, Los Angeles, San Diego, Santa Monica, and Anaheim are together suing Expedia, Travelocity, Priceline, and other companies that do hotel reservations over the issue, with LA County Superior Court Judge Elihu Berle ruling against the cities last month. Appeals are expected in the case.

The issues are different in that case because the hotels are still paying the tax, based on discounted room rates charged after the companies collect their fees. Airbnb, Vacation Rentals By Owner (vrbo.com) and other companies have contested the requirement that they pay any local taxes on their service.

Cisneros told us he made it clear last year through hearings and a ruling interpreting city tax law that Airbnb must pay the Transient Occupancy Tax: "We work very hard to collect all taxes and to make sure everyone is clear on when taxes apply, which is why we did these hearings."

Board of Supervisors President David Chiu has been in negotiations with Airbnb, similar companies, the Hotel Council of San Francisco, and other interested parties to develop legislation to address the "legal grey area" they occupy, as The Economist magazine put it in a March 9 cover story on "The sharing economy."

As I explored in my own investigation last year ("The problem with the sharing economy," 5/1/12), Airbnb's basic business model often runs afoul of city laws (such as the ban on charging guests more than the tenant pays in rent) and private leases (which routinely prohibit subletting of apartments), as well as raising complicated tax, liability, and land use issues.

In high-cost cities like San Francisco that have complex landlord-tenant dynamics, Airbnb can be a way to skirt local protections. New York City essentially banned Airbnb rentals in 2010 and last year went after a landlord for using the service, threatening fines of up to $30,000, according to The Economist.

"The shareable economy has raised many new and complicated public policy issues," Chiu told us. "Crafting legislation on shareable housing spaces has taken longer than expected because of these complications, but we hope to have something in the coming months."

Chiu has staked out a middle ground on the shared housing issue, in the past authoring legislation that challenged the "hotelization" of San Francisco apartments by corporations seeking to get around local tenant protections, expressing hope that his legislation will legalize Airbnb's activities in ways that both its supporters and critics can live with.

Notably, Chiu also differed from Lee on the tax issue when it arose last year. As Chiu told us, "It has always been my perspective that we need to treat Airbnb and similarly situated companies the same as we treat our hotels."

Comments

dubiously valid "hotel tax" then, quite simple, people like me would stop using them, and instead use CraigsList or a host of other sites. You would simply skew the playing field against AirBnB and in favor of sites that merely provide "connection" (rather like an online dating site" but where the bookings are done peer-to-peer.

This is similar to the recent decision by Amazon to start charing CA sales tax on online purchases made from CA. I now use other online verndors who do not apply the CA tax.

In any event, as an AirBnB user myself, I feel very strongly that it is entirely inappropriate to charge a hotel tax on what is clearly not a hotel. I will not pay it - it's that simple.

Posted by Guest on Mar. 20, 2013 @ 11:34 am

Nobody likes paying taxes, but they fund the city services that we all use, and the city has determined that Airbnb and its users owe them. Change the law if you have the political ability to do so, but mere tax evasion is not a principled or legal position to adopt.

Posted by steven on Mar. 20, 2013 @ 11:58 am

unjust tax law. Imposing a 14% tax on people letting out their spare bedroom for the odd night is a massive inequity and, like every other AirBnB user I have met, we will not pay it.

You support workers going on strike when they are not happy. Consider this a tax strike.

Posted by Guest on Mar. 20, 2013 @ 12:40 pm

Like a typical Tea Party conservative, you're misrepresenting this country's history and founding principles. The Boston Tea Party was a protest about autocratic government using tax policy to support a corporate monopoly (the East India Company) and undermine fair competition and colonial self-determination. Last year's ruling was our elected Tax Collector promoting fair competition and the need for local revenue through a transparent process in which the arguments of Airbnb and its customers were considered and rejected. If you don't like that ruling, just convince six members of the Board of Supervisors to change the law. This isn't "taxation without representation," or organizing for rights in the workplace, or any noble cause that you'd like to align yourself with. It's just you being too greedy and selfish to pay your taxes. If a company's business model doesn't pencil out without an unfair advantage over its competitors (in this case, local hotels), then that company doesn't have a viable business model, no matter how much it gets hyped by the mayor and his billionaire backers.

Posted by steven on Mar. 20, 2013 @ 1:06 pm

The Tea Party was not opposed to taxation, they were opposed to taxation without representation.

Posted by marcos on Mar. 20, 2013 @ 1:15 pm

we would not tax aliens, felons or anyone else who cannot vote here.

Posted by Guest on Mar. 20, 2013 @ 1:23 pm

imperial power assessing unjust taxes, and a municipality doing the same thing.

Of course the local tax collector is going to decide that ad hoc room and flat rentals are taxable. He wants his money - that's his job.

But it is a gross and obscene distortion of the hotel tax to apply it to someone renting out a spare bedroom because there is no way I am offering hotel services. It's more like i am having a friend stay.

If we allow this punitive and confiscatory tax to stand what next? I can envisage these:

1) A tax on the "imputed rent" if i let someone stay in my home for free

2) A tax on house-swaps where, say, I stay in your Paris home and you stay in my SF home.

This tax also cannot work because it is unenforceable. As I said, even if you convinced AirBnB to add the tax onto bookings, people would just use another site that doesn't do that, akin to how Amazon lost business in CA when it started charging the CA sales tax.

The idea that a tax inspector can enter your home and determine that you are allowing someone else to stay there is a gross infringement of personal liberty and property rights. I hold the tax to be invalid and illegal.

Can't pay; won't pay. Charge hotel taxes on real hotels. I am a landlord, not a hotelier.

Posted by Guest on Mar. 20, 2013 @ 1:22 pm

I completely agree with you, Guest. I am also a landlord who rents out rooms on Airbnb. Airbnb could hardly be expected to collect hotel taxes, firstly, because the hotel tax rates vary widely across the nation and the world, and some areas have no such taxes. In California the taxes vary by city and some cities have no hotel taxes. Second, hotel taxes only apply for certain short term occupancy. But guests on Airbnb can make bookings for long-term stays as well, which do NOT fall under the hotel tax any more. So in addition to sorting out thousands of different taxes, Airbnb would have to sort out all bookings according to length of stay. Another problem: a guest may initially book for a short stay, but then alter the reservation and stay longer. The initial stay booked may come under hotel tax, but if the booking is extended to over 30 days, then no hotel taxes apply to the whole booking, so what then happens to taxes that were charged? Or alternatively, what if someone originally makes a long term booking, but changes it to short term?

And then too, your point is well made that if Airbnb starts collecting hotel tax, there is nothing to prevent people from using other existing or startup websites from making the same arrangements...for instance Craigslist. I know one landlord who rents out rooms by the day using Craigslist only, not Airbnb. WHo is going to ever sort through the millions of listings on Craigslist to find people doing this? Moreover, Craigslist does not have the private contact information of any of those posting ads on its site, so good luck finding the individual who posted any given ad.

As I see it, there is no point in a hotel tax except for governments finding another way to gouge citizens. Everyone already has to pay federal, state and city income tax, and property taxes which in the Bay Area are very high.

Posted by Guest on Jul. 23, 2013 @ 8:01 am

I completely agree with you, Guest. I am also a landlord who rents out rooms on Airbnb. Airbnb could hardly be expected to collect hotel taxes, firstly, because the hotel tax rates vary widely across the nation and the world, and some areas have no such taxes. In California the taxes vary by city and some cities have no hotel taxes. Second, hotel taxes only apply for certain short term occupancy. But guests on Airbnb can make bookings for long-term stays as well, which do NOT fall under the hotel tax any more. So in addition to sorting out thousands of different taxes, Airbnb would have to sort out all bookings according to length of stay. Another problem: a guest may initially book for a short stay, but then alter the reservation and stay longer. The initial stay booked may come under hotel tax, but if the booking is extended to over 30 days, then no hotel taxes apply to the whole booking, so what then happens to taxes that were charged? Or alternatively, what if someone originally makes a long term booking, but changes it to short term?

And then too, your point is well made that if Airbnb starts collecting hotel tax, there is nothing to prevent people from using other existing or startup websites from making the same arrangements...for instance Craigslist. I know one landlord who rents out rooms by the day using Craigslist only, not Airbnb. WHo is going to ever sort through the millions of listings on Craigslist to find people doing this? Moreover, Craigslist does not have the private contact information of any of those posting ads on its site, so good luck finding the individual who posted any given ad.

As I see it, there is no point in a hotel tax except for governments finding another way to gouge citizens. Everyone already has to pay federal, state and city income tax, and property taxes which in the Bay Area are very high.

Bay Area property owners have huge headaches to deal with in terms of the heavy tenant bias of local landlord-tenant laws, high property taxes, and the many entitled, arrogant, disrespectful and bullying tenants in the Bay Area who are happy to make full abuse of laws in rent controlled cities. Some landlords choose to get out of this mess by refusing to do any more long term rentals, and renting on a short term basis only, such as through Airbnb. As more and more rental properties are taken off the rental market by landlords who have grown tired of nightmare tenants and their abuse, tenants will have only themselves to blame for the shortage of long term rental units.

Posted by No more taxes on Jul. 23, 2013 @ 8:12 am

Thing that bugs me about the BTP is that they dressed up like Indios. Why'd they do that? Talk about no balls.

Posted by pete moss on Mar. 20, 2013 @ 4:55 pm

revovutionary war.

Are you some type of latter-day colonial?

The modern Tea Party is a natural reaction against American policies that are increasingly following the very European system that we all feld here to escape.

Posted by Guest on Mar. 20, 2013 @ 5:15 pm

No, that was chickenshit disguising themselves as Indians. I don't think the natives gave a hoot about whiteys tax squabbles.

Posted by pete moss on Mar. 21, 2013 @ 4:14 am

It depended which side offered them the best baubles.

Posted by Guest on Mar. 21, 2013 @ 6:56 am

Nobody likes taxes since it's basically theft of our earnings and our wealth. But we know taxes are needed to pay for government services so why is it okay that working people pay over 15% payroll tax on every dollar earned, but landlords are incensed tthey might have to pay the applicable hotel tax? I don't have a choice whether to work or not if I want to survive so I have to pay the payroll tax and a dozen other taxes, but landlords and hotels can easily avoid the tax by selling the property to someone who doesn't mind paying the tax.

This story needs more follow-up. How many hundreds/thousands of SF housing units are using AirBnB and how many hundreds/thousands of homeowners are paying the city's hotel tax? We don't need public disclosure of specific taxpayer names or financial data, but we should be able to get access to broad categories of tax compliance for different types of taxpayer businesses, including taxpayers who rent out their homes on a short-term basis like hotels.

I'd start with a raid on AirBnB offices to find out the names of all SF homeowners who are using the service, and then let the Treasurer's office correlate those names with the filing of the required tax forms and applicable tax payments.

I suspect the mayor's office and treasurer's office don't want to cross swords with wealthy landlords who are using the AirBnB service, but this is where journalism does its best work - making powerful politicians accountable to the public. Average lower and middle income working people are paying combined taxes of 30-40% on their entire income. It seems only fair wealthy "part-time" hotel operators should be paying their fair share too.

Good article. I hope to read follow-up stories soon.

Posted by guest on Mar. 20, 2013 @ 1:12 pm

adding in a "hotel tax" when I am not a hotel is a step too far. This is blatant opportunism on the part of the city, and also represents an insidious form of double taxation since it applies to the gross amount of the revenue, whereas the profit is just a fraction of that.

Cities like hotel taxes because it is passed onto the cost of a room, which is paid for by foreigners and out-of-towners. But there is no provision to pass on the tax to a short-term guest, so it comes out of my pocket.

Posted by Guest on Mar. 20, 2013 @ 1:28 pm

When you rent out a room on a short-term basis you ARE operating a hotel. If you don't want to pay the tax, don't rent out the room, or rent it for a higher price to cover the tax bill, or sell the building to someone else who isn't a tax cheat like yourself.

I hope there's a 300% penalty, interest, and city-attorney/DA collection charges on all those AirBnB tax cheats so they'll think twice next time about cheating the city out of its legal taxes.

Posted by Guest on Mar. 20, 2013 @ 1:40 pm

Turndown service? NO

Concierge? NO

Check-in desk? NO

Keycard door entry? NO

Buffet breakfast? NO

Bar and restaurant? NO

Valet parking? NO

Clean and press service? NO

Bag carrying service? NO

Call you a cab? NO

You get the idea.

Posted by Guest on Mar. 20, 2013 @ 1:52 pm

The tax may be called a "hotel tax," but it's a tax imposed on short-term stays in any facility. All that is required is renting out a sleeping space and collecting a room fee. No other services are required to be provided. I doubt even a restroom facility is a prerequisite to being considered a rental unit subject to the tax.

Until the Treasurer has reviewed all AirBnB and Craigslist records for SF properties that have used their services to rent out sleeping spaces for transients, and compared them against the actual tax returns filed, we'll have no idea how much compliance or non-compliance there really is. My guess is there are at least hundreds of tax cheats currently walking the streets who really should be in jail for tax evasion.

I'll look forward to regular SFBG progress reports of what the Treasurer has found and how far along their complete auditing of all short-term rentals over the past few years is proceeding.

Posted by Guest on Mar. 20, 2013 @ 2:19 pm

have stayed there. Ditto for many of the other hotel services cited. There is a clear distinction between a hotel and me occasionally having people stay in my home.

Of course, yes, the city can choose to try and tax anything they like, and routinely do, regardless of fairness or reasonableness. And in return people are free to take evasive action and find ways around it, as in when I order stuff off the internet.

But one golden rule of taxation is that there has to be some way of enforcing and collecting and, in this case, that clearly cannot happen and does not happen.

AirBnB may be a soft touch with deep pockets but, if they are compelled to collect a tax, they will lose most of their business, which will find other routes. You mentioned CraigsList but they merely publish ad's - they clearly have no idea what business ends up being transacted and, moreover, do not really know who the advertizers are in real life.

Pick your battles, dude. There is no way we want local bureaucrats busting into our homes to check on whether we might have a guest there. Back off.

Posted by The real Real SF Anti-Stupidity Campaign on Mar. 20, 2013 @ 4:59 pm

It seems that the more "real" the SFASC claims to be, the more it circles back around to just plain stupid. There's a very simple way for Airbnb to collect this tax, it just needs to be added on to each transaction the company facilitates. And I see no evidence that a 14 percent tax will doom a service in which people can charge whatever they want for a room and the only overhead they have is their rent or mortgage. Finally, nobody has proposed local bureaucrats busting into people's homes, a suggestion that real is just plain stupid.
If I want smart comments, I'll still with the original SFASC.

Posted by steven on Mar. 21, 2013 @ 8:57 am

they? If SF wants to collect tax, it should invest in hiring tax collectors to enforce this dubious tax, rather than expect AirBnB to do it for them for free, and especially when a 14% hike in costs will drive business to other rival firms who will not agree to do the same.

Or AirBnB may simply move to, say, Brisbane and give SF the finger.

Steven, since you have often supported civil disobedience in the past, I imagine you will feel the same sympathy for those of us who practice civil disobedience by refusing to [pay this infernal, intrusive, punitive tax.

Posted by Guest on Mar. 21, 2013 @ 9:16 am

Such hypocrites!!!.... they want everyone to "pay their fair share". But threaten their subsidized rent and they spew hate as well as the KKK ever did.....

Posted by Guest on Feb. 04, 2014 @ 1:48 pm

I thought the USA was founded on the princeple of tax evasion-Boston Tea Party and all that. I wish I had the resources to evade some taxes

Posted by pete moss on Mar. 20, 2013 @ 4:51 pm

You were supposed to declate that purchase on your CA tax return. But of course you did not, like everyone else.

Posted by The real Real SF Anti-Stupidity Campaign on Mar. 20, 2013 @ 5:00 pm

Believe it or not I haven't bought anything on line. I'm a failure as a consumer, lord help me.

Posted by pete moss on Mar. 21, 2013 @ 4:18 am

near guarantee that nobody declares that on their state tax return, as they are supposed to do.

So it is hypocritical of most people to criticize others who avoid taxes.

While in this case, it is really not about avoiding taxes but rather the principle of civil disobedience against an unjust tax. I know for a fact that steven has supported civil disobedience in many prior cases, sich as Occupy.

Posted by Guest on Mar. 21, 2013 @ 6:55 am

It's not that simple, the definition of the tax clearly would include AirBnb -

"Transient Occupancy Tax (TOT) is charged in California when occupying a room or rooms or other living space in a hotel, inn, tourist home or house, motel or other lodging (defined below) unless the stay is for a period of 31 days or more"

Posted by Guest on Apr. 05, 2013 @ 7:40 am

are under an obligation to separately collect it.

With Expedia and Travelocity, they do collect the tax effectively, but only because the hotels include the tax in the price of the rooms they sell via the intermediary.

The equivalent here would be for the AirBnB hosts to add 14% to their asking price, and then pay SF the tax themselves.

The ultimate obligation has to be with the host since they are the ones getting the money from the guest. AirBnB's cut is less than the tax.

Posted by Guest on Apr. 05, 2013 @ 8:12 am

Airbnb handles the bookings and takes the payment. They are who should be responsible for collecting the hotel tax. This is not on the people listing their properties. Airbnb is shirking its duties here.

Posted by Justin on Mar. 20, 2013 @ 1:31 pm

should they collect it? That's effectively the city telling AirBnB that it doesn't want to invest in tax collection and so imposes that on the company instead.

That might be fine if AirBnB were a legal party to the underlying contract, but it is not. It is simply putting two parties in touch with each other, kinda like match.com

AirBnB owes local taxes on it's profits. It is not it's job to do the city's job for them.

And who would use AirBnB if that meant paying the tax? We'd just use CraigsList instead.

Posted by Guest on Mar. 20, 2013 @ 1:40 pm

When a guest makes a booking on Airbnb, that guest pays Airbnb, not the property owner. Airbnb then pays the owner a portion of that payment. In my view that makes two contracts - one between the guest and Airbnb and then another between Airbnb and the owner.

If the owner had a choice of how payments were made and handled it directly themselves, like on CL or VRBO, then that would be different.

One for the lawyers I guess...

Posted by Justin on Mar. 20, 2013 @ 1:54 pm

easily change it's business model if they were forced to collect taxes, which does not seem reasonable here.

AirBnB could simply charge a fee for putting a buyer and seller in touch, like with E-Bay, which does not collect sales tax.

This tax is iniquitous because me sharing my home with someone is not by any reasonable measure the act of a hotelier.

The real thing that is going on here is that rent control has gotten so strict that people like me are virtually forced to use AirBnB and temporary stays in order to retain the desired ROI. The city doesn't like that but cannot do anything about ti, except try this flimsy tax idea.

Sorry, guys, but it is either AirBnB or Ellis, TIC or condo. Your choice.

Posted by Guest on Mar. 20, 2013 @ 2:07 pm

Why would Airbnb change its business model? They, nor the owners, pay the tax. The guests pay the tax. This isn't about the tax payment, it's about how it gets collected.

Posted by Justin on Mar. 20, 2013 @ 2:17 pm

For months we've heard that any new taxes on landlords would be merely passed along to tenants, even though it was shown repeatedly that this wasn't true. Now Guest (anon) is arguing that he can't afford the taxes and he wouldn't be able to collect them from the short-term renters.

Of course we knew anon always made self-serving arguments to fit his very selfish worldview so it's not surprising he (and others) would resort to lying to make a point, but it's fun to watch nonetheless.

Posted by guest on Mar. 20, 2013 @ 2:27 pm

is clear that responsibility for paying the tax does not rest with AirBnB.

Either it sits with the visitor, as you suggest, in which case the city should pursue that visitor for the tax.

Or it sits with the renter, in which case the city should try and enforce that collection.

Neither way is the tax due from AirBnB, and so it seems wrong for the city to employ AirBnB as a free tax collector when they should be doing that job themselves.

Posted by Guest on Mar. 20, 2013 @ 3:00 pm

I read through the SF Transient Tax Code. It clearly says that the hotel "operator" is responsible for collecting the tax. So I stand corrected there - this is on the owners.

However, I would say this is a grey area in the sense that Airbnb is the one collecting the payment from guests so I would say as part of that collection they should also be collecting the tax. No where in the property listing administration on the website do they have a provision for "Add a tax to be collected". They should have that so the listing price can be shown exclusive of the tax and have it be a level playing field.

So are owners responsible for collecting the tax? Yes. Should Airbnb be doing more to help owners collect the tax? Yes.

Posted by Justin on Mar. 20, 2013 @ 3:48 pm

TAX ON TRANSIENT OCCUPANCY OF HOTEL ROOMS
(San Francisco Business and Tax Regulations Code, Article 7)

http://www.sftreasurer.org/index.aspx?page=98

Posted by Justin on Mar. 20, 2013 @ 3:57 pm

rather implies that your spare bedroom is not subject to the tax because it is not a hotel room.

Posted by Guest on Mar. 20, 2013 @ 4:46 pm

The transit occupany tax applies to anyone renting out a room on a regular basis, regardless if they are a "hotel" or not. Even the Chronicle agrees with steven's interpretation:

From an April 2012 Chronicle article about the same subject:

"The treasurer's office said its regulation issued Tuesday was simply a clarification of the law, which requires anyone who rents out a guest room to pay the city's roughly 15 percent transient occupancy tax - commonly referred to as the hotel tax. The tax is 14 percent, plus a 1 or 1.5 percent fee for improving tourism districts. There is an exception for rooms that are less than $30 a day or $100 per week.

"We're not changing the law," said Greg Kato, policy and legislative manager for the treasurer and tax collector. "We're simply explaining existing law."

To repeat: ... "which requires *anyone* who rents out a guest room to pay the city's roughly 15 percent transient occupancy tax..."

Based on admissions contained in the comments here, it seems clear many SF landlords who are renting out rooms to short-term transients are not paying the occupancy tax. The DA and Tax Collector's Office should subpeona all AirBnB records to determine who in SF has used their services and then cross reference the tax records to determine who has not paid the required tax.

Most landlords are millionaires. It's appalling the wealthiest among us refuse to pay their fair share of taxes while leaving the tax burden to the lower and middle income working families. Call me not surprised.

http://www.sfgate.com/bayarea/article/Airbnb-other-sites-owe-city-hotel-...

Posted by Guest on Mar. 20, 2013 @ 5:36 pm

Tenants who rent rooms must be included in the investigation. The city can not only collect from the alleged tax evasion, but also free up more rental housing following their eviction due to lease violations.

Posted by Guest on Mar. 20, 2013 @ 5:53 pm

AirBnB were compelled (somehow - no idea on what basis) to open their books.

Perhaps that is why the city isn't pushing on this - yet another example of the law of unintended consequences.

While if a homeowner occasionally rents out a spare bedroom, who cares?

Posted by Guest on Mar. 20, 2013 @ 6:09 pm

A hotel regularly rents out rooms because that is the sole business it is in.

But my spare bedroom is regularly used for other purposes, but occasionally used for guest.

Very different.

Posted by Guest on Mar. 20, 2013 @ 6:04 pm

1) Due from the visitor, or

2) Due from the owner, or

3) Due from whatever third party it can possibly be pinned on.

IOW, nobody knows.

I would take the view that all taxes must ultimately be on the end consumer, much as they are with a sales tax. And that the city should not be trying to push tax collection onto anyone other than the people it pays to do that.

On that basis, it is my view that the city should pursue anyone staying in a short-term facility to pay the tax. This includes SRO's and people renting out their home.

Posted by Guest on Mar. 20, 2013 @ 4:44 pm

As I wrote in my article, Airbnb and the hosts are jointly liable for paying this tax to the city, and it's up to them to collect it from the guests. If they choose not to, then they still have a "joint and several liability" for paying it. That's why Airbnb is ultimately screwing over its own hosts by thumbing its nose at last year's ruling by the city.

Posted by steven on Mar. 21, 2013 @ 9:03 am

They are not providing hotel rooms themselves, nor are they a party to the peer-to-peer contract between the host and the guest.

As you admit, it is the host who is liable for the tax and, as AirBnB clearly state on their website, the host has a responsibility to offer to pay the tax. Whether they actually do or not is another matter of course, and the city is free to hire tax collectors and investigators to pursue such tax avoidance if they think it will be upheld in a court of law.

There is no "joint and several" liability. You made that up. And anyway, hosts can find guests thru CraigsList or similar, and avoid AirBnB altogether if a 14% levy was imposed.

Posted by Guest on Mar. 21, 2013 @ 9:20 am

While the SFASC appreciates Steven's article and his participation in the discussion after we must disagree with his conclusion: Airbnb is not a hotel. The city's tax structure, specifically the hotel tax, was designed for a time when people didn't engage in peer-to-peer commerce like we are seeing with Airbnb. Perhaps a tax is justified - then one designed specifically FOR this type of service would be preferable.

We urge Steven and those advocating for a "one size fits all" approach to these new types of services, to take a step back and see if it's possible to solve this problem without stifling businesses built on new models.

Closed.

The REAL San Francisco Anti-Stupidity Campaign

Posted by The REAL San Francisco Anti-Stupidity Campaign on Mar. 20, 2013 @ 2:34 pm

would surely, eventually, got something right.

And he has done here.

Posted by Guest on Mar. 20, 2013 @ 3:03 pm

I'm sorry to hear the SFASC has an issue with my arguments because I appreciate the work you've done bringing sanity to our comments section. Please allow me to submit an argument for your consideration. This tax is actually called the Transient Occupancy Tax, even though it's popularly called the hotel tax. It's designed to help pay for the city services that visitors use, from our transportation system to police services to street cleaning, as well as contributing to the general fiscal health of this great city. And on an even more basic level, most economic transactions are taxed in this society, it's how we pay for our government. Sure, there's always been an underground economy (ie the drug trade, sex work, day labor, etc.) involving peer-to-peer transactions, but in this case we're talking about a multi-million-dollar corporation that is taking a healthy profit on each of these transactions and I don't understand the argument that it should be exempt from taxes. And even if we differ on that point, isn't that something that should be hashed out in a transparent political process involving our elected officials rather than a unilateral corporate decision to engage in tax evasion? C'mon, SFASC, that doesn't sound like a very smart position that you appear to be taking.

Posted by steven on Mar. 20, 2013 @ 3:18 pm

the value of her transactions? But that someone who rents out his spare room to a Swiss visitor should?

Why the difference? surely not because SFBG gets most of it's revenues from hooker ad's? In whichc ase, your argument is no different from AirBnB's - you want to tax other businesses but not your own.

And anyway, SF has a sales tax and a gross receipts tax already. Why the need for another 14% on top?

Tourists typically pay top dollar for everything while they are here, while consuming far fewer services than residents, so the city already makes a fat profit out of them. That's no argument for another 14% on top.

To your other point, the issue isn't AirBnB paying the tax because they do not owe the tax, The visitor does. So why do you want private companies doing the city's tax collection for free? Shouldn't the city at least pay AirBnB's extra costs for doing that?

You are 100% wrong on this, Steven. So wrong, in fact, that even SFASC has called it.

Posted by Guest on Mar. 20, 2013 @ 3:31 pm

Thank you Steven for you reasoned comment - the SFASC does not take issue with the need for a tax but would like for any tax to fit the new business model we're seeing with peer-to-peer sharing of services like rooms and taxi cabs and others. Perhaps a model like Task Rabbit would work where the service reports to tax authorities and reminds participants they are subject to tax laws as well as issuing something like a 1099 form? That would ensure the income is reported and subject to tax laws. We see the application of a 14% tax designed for large corporate hotels as stifling the creativity of peer-to-peer solutions.

And yes we agree with Steven that anything which is hashed out should be done so in a transparent political process. We believe no one disagrees on that. However as you well know - very little in San Francisco politics occurs in that manner.

Closed

The REAL San Francisco Anti-Stupidity Campaign

Posted by The REAL San Francisco Anti-Stupidity Campaign on Mar. 20, 2013 @ 3:31 pm