Time to enforce the law

Airbnb owes the city some money -- will we ever collect?

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EDITORIAL The new tech companies that are making waves in San Francisco — Airbnb in the short-term rental business and Lyft and Uber in the taxi industry — may describe themselves as innovative and disruptive, and they may be appealing to investors.

But there's a more accurate word that describes their relationship to the city:

Cheaters.

The way these companies are luring customers isn't really about high-tech applications or brilliant business models. They've just found a way to get around the rules that everyone else has to obey.

Some city officials are talking about hearings and new legislation, all of which is fine. But in the rest of the business community, when someone flagrantly, openly violates the regulations, the City Attorney's Office cracks down. That's what needs to happen here, and soon.

Airbnb has a slick and appealing promise: You can rent out your house or apartment on the Internet to someone who wants to stay in the city for a few days, but is looking for an alternative to a traditional hotel. The homeowner or tenant gets some extra bucks; the visitor gets to stay in a cool neighborhood at a bargain price. What's not to like?

Well, for one thing, most leases in San Francisco bar unauthorized sublets, so renters who offer their places on Airbnb face problems with their landlords, including possibly eviction. City laws also bar the use of residential property for commercial purposes. And, as we've pointed out repeatedly, Airbnb isn't collecting the transient occupancy tax that every other hotel operator in the city has to pay. The total tab: At least $1.8 million a year.

Lyft and Uber say they're using creative apps to offer an alternative to the screwed-up taxi system. Drivers offer rides to people who can "volunteer" to pay at the end — but if nobody pays, the whole business model fails and the venture capitalists who put up the money lose. So everyone knows that these are pay-for-hire taxis.

Except that San Francisco requires every taxi driver to have a permit, called a medallion — and drivers have to go through training, background checks, and carry extensive insurance. If a driver overcharges or refuses a fare, a customer can complain to the city, and get recourse. The startups don't follow the same rules.

There are reasons the city regulates cabs and charges hotel taxes. Cab drivers are ferrying people, some of them vulnerable; it's only a matter of time before a rogue driver who sneaks into the new unregulated startups winds up in a horrible crash or criminally preying on riders.

Driving a cab without a medallion is illegal. Failing to pay city taxes is, too. City Hall can debate and dither and try to avoid offending the mayor (who, unfortunately, is trying to help Airbnb slide). But this is a clear-cut case of businesses flouting city law. Herrera needs to put an end to it.

 

Comments

You make 3 points about airbnb:

1. It would violate rental agreements. In my experience, most airbnb hosts are owners, not renters. If renters are illegally subletting their apartments on airbnb, that's between them and their landlord. I can understand a landlord wanting to minimize risk to their building by limiting the number of people staying there, but many landlords probably wouldn't mind changing their contract to allow their renters to sublet via airbnb; all the renter has to do is ask. You could argue that airbnb should require hosts to either demonstrate ownership or show a release from the landlord allowing the airbnb use, but really it should be up to landlords to supervise the use of their units, not airbnb.

2. City law bars commercial use of residential property. Come on, this is so obviously a stupid law in its extreme generality. I can understand not wanting people to operate retail stores or factories on a residential block, but for people working in a home office, or using a spare room as a massage studio or artist's workshop, or babysitting a neighbor's kid, or making cookies for the farmer's market, or renting a room out to a roommate, or renting a room on airbnb, it's just idiotic for the city to preclude these activities. Don't pick on airbnb hosts, work to reform the dumb law that makes all sorts of laudable activity technically illegal!

3. Airbnb doesn't charge the city hotel tax. Personally I think this is another case of a stupid law. Hotel taxes are ridiculously high, and they hurt the economy by penalizing tourism. But really: it's not like people would lose interest in airbnb if they started charging the hotel tax. The prices would be higher, but people would still love the airbnb experience. If airbnb renters really were that sensitive to pricing, the hosts would just lower their rates and eat the tax themselves. So yes, as long as the tax is in the law, airbnb hosts should ideally collect it, but that hardly means airbnb gets its customers just by evading taxes, not by having a brilliant business model. The business model *is* brilliant, and while the tax issue probably does give them a small extra boost, it's by no means essential to their success.

As for the taxi-like services, it is a different business model, so there's no reason it necessarily *should* follow the same rules. A law preventing taxi drivers from overcharging doesn't make sense for a business model where payment is voluntary. It probably would be good to have a law against refusing someone a ride for arbitrary reasons, such as racism, but aren't there *already* laws to prevent arbitrary discrimination in whatever kind of business transaction? To the extent these new services require regulation, the regulations should be designed to apply to the new services.

Overall, it seems like you're just picking on these businesses for having ideas that don't fit into your preconceived ideas of how things work. Yes, airbnb should collect the hotel tax, but maybe your anger would be better directed to lowering the hotel tax and raising property taxes instead (and reforming Prop 13 if that's a prerequisite), and also to reforming the ridiculous prohibition against commercial use of people's homes.

Posted by Guest on Apr. 03, 2013 @ 11:55 am

While in theory they might love something like, say, Twitter because it enables Occupiers and protestors to keep one step ahead of the police during demonstrations, and feels very "democratic", they also hate IT because it skews the SF demographic away from old-school union-run workplaces in favor of modern, knowledge workers who have little truck with old-school socialism.

SFBG never really recovered from the way CraigsList stole their hooker ad revenue and, from their POV, that takes a lot of forgiving and justifies a "war on technology".

Posted by Anon on Apr. 03, 2013 @ 12:22 pm

You make 3 points about airbnb:

1. It would violate rental agreements. In my experience, most airbnb hosts are owners, not renters. If renters are illegally subletting their apartments on airbnb, that's between them and their landlord. I can understand a landlord wanting to minimize risk to their building by limiting the number of people staying there, but many landlords probably wouldn't mind changing their contract to allow their renters to sublet via airbnb; all the renter has to do is ask. You could argue that airbnb should require hosts to either demonstrate ownership or show a release from the landlord allowing the airbnb use, but really it should be up to landlords to supervise the use of their units, not airbnb.

2. City law bars commercial use of residential property. Come on, this is so obviously a stupid law in its extreme generality. I can understand not wanting people to operate retail stores or factories on a residential block, but for people working in a home office, or using a spare room as a massage studio or artist's workshop, or babysitting a neighbor's kid, or making cookies for the farmer's market, or renting a room out to a roommate, or renting a room on airbnb, it's just idiotic for the city to preclude these activities. Don't pick on airbnb hosts, work to reform the dumb law that makes all sorts of laudable activity technically illegal!

3. Airbnb doesn't charge the city hotel tax. Personally I think this is another case of a stupid law. Hotel taxes are ridiculously high, and they hurt the economy by penalizing tourism. But really: it's not like people would lose interest in airbnb if they started charging the hotel tax. The prices would be higher, but people would still love the airbnb experience. If airbnb renters really were that sensitive to pricing, the hosts would just lower their rates and eat the tax themselves. So yes, as long as the tax is in the law, airbnb hosts should ideally collect it, but that hardly means airbnb gets its customers just by evading taxes, not by having a brilliant business model. The business model *is* brilliant, and while the tax issue probably does give them a small extra boost, it's by no means essential to their success.

As for the taxi-like services, it is a different business model, so there's no reason it necessarily *should* follow the same rules. A law preventing taxi drivers from overcharging doesn't make sense for a business model where payment is voluntary. It probably would be good to have a law against refusing someone a ride for arbitrary reasons, such as racism, but aren't there *already* laws to prevent arbitrary discrimination in whatever kind of business transaction? To the extent these new services require regulation, the regulations should be designed to apply to the new services.

Overall, it seems like you're just picking on these businesses for having ideas that don't fit into your preconceived ideas of how things work. Yes, airbnb should collect the hotel tax, but maybe your anger would be better directed to lowering the hotel tax and raising property taxes instead (and reforming Prop 13 if that's a prerequisite), and also to reforming the ridiculous prohibition against commercial use of people's homes.

Posted by Guest on Apr. 03, 2013 @ 11:56 am

It's ridiculous to say that rented apartments cannot be used for commercial purposes because the very act of a property owner renting it to a tenant makes it a commercial use.

The fact that that tenant then does exactly the same thing doesn't change anything.

The problem with applying SF's hotel tax to a global online business is obvious. Are AirBnB supposed to be experts on the tax and rental rules of every city on the planet? Obviously not, and so it has to be ultimately up to the hosts to deicde whether to obey their local laws. That cannot be reasonably levelled at a broker.

But I'm not sure I agree with you that most AirBnB'ers are property owners. Anecdotally, at least, as many of them are tenants.

What SFBG are really arguing for is the application of "old school2 laws and rules to "new school" business models. I agree with you that that is a flawed approach.

Posted by Guest on Apr. 03, 2013 @ 12:14 pm

"the very act of a property owner renting it to a tenant makes it a commercial use."

Exactly. Either residential property can be rented (a commercial use) or it can't. Seems like a silly point that editorial is making. Does anyone have a link to the text of the law that bars commercial use?

Posted by Justin on Apr. 08, 2013 @ 12:33 pm

Housing is rented for residential use through a commercial transaction that has nothing to do with land use.

Posted by marcos on Apr. 08, 2013 @ 1:56 pm

of AirBnB is not a valid land use issue, and nor is forming a TIC by evicting all the tenants.

In fact, I agree with you. The city has no business telling a homeowner what use he or she should put the home to, whether that be renting, owner occupation, or other.

Posted by Guest on Apr. 08, 2013 @ 2:08 pm

Guest (anon) writes: "Are AirBnB supposed to be experts on the tax and rental rules of every city on the planet? Obviously not, and so it has to be ultimately up to the hosts to deicde whether to obey their local laws."

If Guest (nee anon) thinks that the executives of AirBnB and its lawyers are not fretting over local tax laws, anon is even more clueless than imagined. I suspect anon has never worked at a high enough level in any business to realize how clueless this statement really is.

The FIRST thing ANY business does before it starts operating in a new market is to learn the local business operating rules, including learning about whatever taxes may be owed on its business activities. Any law firm hired by AirBnB to help with its business expansion would prepare a preliminary document telling AirBnB management exactly what the rules were to legally operate in a new market, including foreign markets, and exactly what taxes and license fees are required for any business activity conducted.

Since their business model is based on house rentals, the local city (state and/orcountry) would have legal authority to regulate AirBnb's business as well as apply local taxes.

If AirBnB wants to operate out of Caymans and its executives never travel to any places where AirBnB collects fees from local rentals, then the execs may be able to avoid criminal prosecution for willful failure to follow local business rules, including local tax rules. But local authorities have other ways to shut down criminal enterprises like AirBnB such as going after the homeowners themselves who are assisting with the criminal operations of AirBnB.

Unlike some of the posters here like anon who support blatent tax evasion, most companies that have a valid business model are very keen to pay their taxes since the public doesn't take very kindly to anyone who lies or cheats on their taxes. If the business relies on the public for its revenues, such as AirBnB, the executives are usually smart enough to make sure any tax disputes are quickly resolved so they don't become a public relations headache.

The issue on the table is why hasn't the city taken this tax issue to court to enforce AirBnb's, Expedia's, Priceline's and any other 3rd parties who are collecting fees related to transient occupancy, and why isn't there a clear process for health and safely code checks before any 3rd party rents out their house or apartment for more than a de minimum use?

Posted by guest on Apr. 08, 2013 @ 4:21 pm

incur sales tax in the State of the customer, then it is clear that internet commerce does not follow the same rules as regular commerce, which requires a physical presence in a jurisdiction.

So imagine this. We make contact via CraigsList and I rent my Bulgarian ski chalet to you for a week. Do I owe Bulgarian tax on that transaction? Maybe, assuming Bulgaria has any jurisdiction over me.

But does CraigsList owe Bulgaria some tax? No, of course noe. Abd Bulgaria would have no way of collecting from CL because CL has no presence in Bulgaria, although it may have a Bulgarian sub-site.

And that's the thing with internet commerce, you see. It's different. The only special case with AirBnB is that is happens to be located in SF, so it might be possible that SF can put some pressure on them which, say, Sofia, Bulgaria cannot.

But that should not blind us to the principle here, which is that it is the guest's location that matters, and not that of AirBnB. If SF imposes a special surcharge on AirBnB for only it's SF stays, that simply means that people will book thru another website that isn't in SF and so cannot be made to pay that cost. Like in Sofia, Bulgaria, for instance.

We can argue about whether AirBnB is like Expedia or not. I happen to think it is different. But either way, it is ultimately the host who is making a profit and they should take into account their own location and any liability that may arise.

Posted by Guest on Apr. 08, 2013 @ 4:48 pm

Airbnb is earning fees from profiting from a local real estate market. In most cases, craigslist isn't earning any fees for matching people up. Big difference. If, or when, craigslist starts earning fees for hooking up renters/visitors with local landlords, the city/state where they are operating will be very vigilant in collecting any taxes due. Since craigslist has a reputation for honesty and fair dealing, I suspect they pay whatever local taxes are required.

Since you post here 24/7 we already know that you don't know anything other than the misinformed opinions you pull out of your ass. It's a good bet that not only doesn't Airbnb or craisgslist listen to anything you spout, but no one who reads comments here listens to your nonsense either. Your mom must be so proud.

And it turns out SF isn't the only place where it looks like Airbnb is breaking the law.

"Bunking in other people’s apartments is a growth industry. There’s a whole (and growing) online universe of apartment-swapping, of sublets, of short-term rentals, promulgated by firms like Airbnb.com. And, as it turns out, nearly every such deal is illegal here. Last week, there were 8,324 properties in the New York area on Airbnb."

http://nymag.com/realestate/realestatecolumn/short-term-rentals-2011-12/

From the looks of it, the owners of Airbnb are operating a criminal tax evasion conspiracy across state lines. Where's the FBI when you need them? Probably out busting a pot smoker or two.

Posted by guest on Apr. 08, 2013 @ 6:10 pm

craigslist isn't the cleanest analogy. Companies like Expedia, Travelocty, Orbitz, Adora, Hotel.com...they all do the exact same thing as AirBNB. Since spare bedrooms are apparently the same as hotels.

How much have they all paid to the city of San Francisco for TOT taxes?

Let me help you out with a clue from Expedia's web site:

"the Expedia Companies do not collect taxes for remittance to applicable taxing authorities...the hotel suppliers are responsible for remitting applicable taxes to the applicable taxing jurisdictions. "

Source: http://www.expedia.com/p/info-other/legal.htm

Yes, most of those companies collect an estimate of the taxes that they pass along to the hotel. So that they can charge the person $100 + $15 instead of $115 to be clear. But that isn't the same thing as owing and paying the tax themselves.

So, go to a Judge and say "Your Honor, make AirBNB pay those taxes because Ron Conway is an investor. And he is close to Mayor Lee. And we really hate Mayor Lee. So please, Your Honor, please make them pay these taxes that their competitors who have been operating for years don't. Because Mayor Lee is a bad, bad man."

Posted by Troll on Apr. 08, 2013 @ 6:45 pm

BZZT. Expedia, Travelocty, Orbitz, Adora, Hotel.com are all aggregators that connect customers to legal businesses that pay occupancy tax, not individuals breaking the law. #trollfail

Posted by marcos on Apr. 08, 2013 @ 6:59 pm

And exactly how do you know that, Marcos?

I can use Expedia to book a room in a cabin in Podunk. So please tell us exactly how you are so certain that the owners of the cabin are paying their full taxes.

Sorry, Marcos, you just don't get to make up the laws that you want. A sad state of affairs, I know. Deal with it. The host is responsible for the tax. Sorry!!!! #loser

Posted by Troll on Apr. 08, 2013 @ 7:23 pm

Hotels are businesses that get licenses to operate like all businesses do, file taxes and are regulated. If the investors don't register the businesses or if these businesses don't pay their taxes and fees, then the individuals or businesses are liable.

Hotels bring a steady stream of people to and from where they operate. They need to pay for the impacts of all those people. AirBnB is the business in this equation and they need to be responsible to ensure proper and legal conduct as they do their business.

Posted by marcos on Apr. 08, 2013 @ 7:49 pm

OK, I think I got it. The guy who rents out his extra bedroom isn't a hotel. But the transaction will be taxed just like he was a hotel, even though he isn't. And he doesn't have to pay taxes anyway, AirBNB does.

Is that about it?

So those are the rules. And AirBNB should not bother to find out if a real Judge would agree....because Judge Marcos has already ruled.

If he isn't a hotel then you have to go back and justify the TOT. And don't bother with the Steven silly nonsense that the TOT is designed to pay for the guest's use of city services. The guy staying at the St. Regis penthouse doesn't use 20x the city services of someone staying in a motel on Lombard. And the penthouse guy doesn't pay twice as much if his wife stays with him. And I don't have to pay anything if my 20 college buddies from Kansas come stay for a week in my basement.

Posted by Troll on Apr. 08, 2013 @ 8:09 pm

An ongoing operation where rooms are rented out is subject to the hotel tax under the law and might not be a valid land use for the zoning district, it might require a CU or it might be as of right.

Posted by marcos on Apr. 08, 2013 @ 8:32 pm

It's just the SF tax collectors opinion that such a tax is due. But there has been no real collection from the hosts, nor has anyone challenged the tax's legality. So we're all guessting here.

What AirBnB does is fundamentally different from what Expedia does. Htoesl quote Expedia the gross room rate includinging the tax. Expedia does not collect the tax itself as a separate item and then pass it onto SF, or wherever. So Expedia does not have to know the tax rules of each jurisdiction - the hotel has to figure that out.

AirBnb quotes the same thing - the room rate am AirBnB host quotes. But in this case the guest is not filing the tax. Maybe that is wrong but it is not AirBnB's job to know that.

The solution is for Hosts to pay their taxes and not for AirBnb to second guess what taxes their hosts may or may not owe according to the law of hundreds of cities across the planet.

Posted by Guest on Apr. 09, 2013 @ 5:44 am

Say the hotel wants $100 in revenue for the room.

They add 14% tax to that, and quote Expedia $114.

Expedia then add their booking fee to that $114. Let's say their fee is $10.

So Expedia offfers the room for $124 and that is what the Guest pays.

Expedia takes $124 from the Guest, pays $114 to the hotel, which gives $14 to SF and keeps the $100

AirBnB works exactly the same way, except that the Guests are, in some cases apparently, not handing over the tax to SF, either because they don't believe the tax applies, or they do not know about it, or as some kind of protest.

AirBnB cannot know if the Host pays the tax or not, but remind Guests that it is their sole obligation to do so. AirBnB are not a tax collection agency, nor can reasonably be expected to know the different tax rates around the planet.

Posted by anon on Apr. 09, 2013 @ 6:21 am

anon writes: "AirBnB are not a tax collection agency, nor can reasonably be expected to know the different tax rates around the planet."

It may be true that executives in big and well-connected companies like Airbnb can avoid jail in the US and a few other countries for willful tax evasion, but most countries aren't so lenient. Almost every country and most big cities on the planet have transient occupancy taxes, a common tax in tourist locations. As long as the executives don't travel to these countries where Airbnnb also practices tax evasion (and they may be practicing tax evasion in most places they operate), the executives can avoid jail.

As usual, anon is wrong about how business works. Every business, corporate or otherwise, is expected to know the local rules and regulations WHEREVER it does business. It's the first question every business asks: what regulations and taxes apply to my proposed economic activity?

Accoording to anon, this is how the Airbnb SEC filing will read:

Airbnb AND ITS EXECUTIVES IGNORE ALL LOCAL TAX LAWS, SUBJECTING THE COMPANY AND ITS EXUCUTIVES TO BOTH CRIMINAL AND SUBSTANTIAL CIVIL FINES AND PENALTIES. Airbnb BELIEVES ITS POLITICAL AND SOCIAL CONNECTIONS MAKE IT MORE POWERFUL THAN THE LOCAL, AND OFTEN CORRUPT, TAX COLLECTORS IN THE PLACES IT OPERATES. IF ANY COUNTRY OR CITY WHERE Airbnb OPERATES EVENTUALLY DECIDES TO PROSECUTE THE COMPANY AND ITS EXECUTIVES FOR WILLFUL TAX EVASION, THE COMPANY MAY GO BANKRUPT.

Posted by Guest on Apr. 09, 2013 @ 7:34 am

physical presence.

Imagine this. You book a room thru AirBnB in Moscow. You pay the "all in " price for that room, and take your trip.

How does Moscor collect their "Transient Communist Comrade Tax"?

1) They write to you in SF and ask for you it? Or

2) They write to AirBnB in SF for it? Or

3) They harass the poor shmuch on Moscow who rented the room, and who is the only person they have jurisdiction over?

Ding, ding, it's number three!

That's the thing with the internet. It really doesn't exist in any one place.

Amazon started asking for the sales tax not because the law required it, but because they wanted a physical presence in CA, i.e. distribution facilities for faster delivery.

I'm guessing that you are over 50, because you just do not seem to get the internet.

Posted by anon on Apr. 09, 2013 @ 7:55 am

Then SF will be all "Tax? What stinking tax?".

And if CA start sniffing their butt, they should move to Brisbane, Australia.

It doesn't really matter where an internet business is situated.

Posted by Guest on Apr. 09, 2013 @ 8:11 am

Nothing would be better for Bay Area residents than the mass migration of all of these large Bay Area technology companies to a place like Australia, or China, or anyplace other than the US west coast. These companies have made housing unaffordable for most of us. They have destroyed millions of acres of open space and farmland caused by the sprawl from housing their employees. They have caused high state taxes to pay for all of the freeways and other multii-billion dollar transportation expenses trying to move their employees from one sprawl location to the next. The employees of these companies evict local residents to take over the limited housing supply. And these compnaies have become experts at shifting state and federal taxes to low tax locations like Singapore, Caymans and Hong Kong, putting more pressure on tax increases to everyone else.

There would be no better outcome to the livability and affordability of the Bay Area and California if these large technology companies would get the hell out of the area and move far away to a place like Australia. All of their little tech slaves will obediently follow.

Posted by Guest on Apr. 09, 2013 @ 9:01 am

on a site filled with moronic postings, this one takes the cake!
Congrats to you

Posted by Guest on Apr. 09, 2013 @ 9:32 am

It is all great fun for some until the bubble pops, the music stops and the chairs dwindle, and we who were here before and still remain are left to clean up yet another mess, our communities in shambles.

Posted by marcos on Apr. 09, 2013 @ 9:56 am

Businesses typically endure and deliver wealth for generations.

Every time someone cites a successful business, you claim it is a bubble. But not everything is a bubble, and in fact bubbles are the exception.

Posted by Guest on Apr. 09, 2013 @ 10:09 am

We are in the midst of speculative tech bubble. We know this because the countercyclical measures put into place after the last bubble popped, taxing stock options, was repealed. We know we're in another speculative bubble when the boosters assure you that we're not in another speculative bubble.

Reagan and Thatcher took the US and UK off of the path of sustainable capitalism and swapped out a real economy for an economy based on a series of speculative bubbles.

The decline in prosperity for 80% of the population over this time proves this definitively.

Posted by marcos on Apr. 09, 2013 @ 12:07 pm

cannot afford the housing here?

Well, boo fucking hoo.

Posted by Guest on Apr. 09, 2013 @ 10:09 am

I constantly spent my half an hour to read this blog's
articles all the time along with a cup of coffee.

Posted by private Browsing on Dec. 05, 2013 @ 1:40 am

Might I suggest that AirBnB take the CalTrain or US-101 South?

Posted by marcos on Apr. 09, 2013 @ 9:09 am

local taxes you have to pay.

If every business left SF, we'd be like Detroit. And that crappy condo you own in a crappy neighborhood wouldn't be worth half a million.

Posted by Guest on Apr. 09, 2013 @ 10:14 am

San Francisco is desirable above and beyond the economy. Its the terrain, climate and natural beauty that make San Francisco, stupid. Detroit is glacial till in the middle of the flyover.

San Francisco would be more like Portland, OR than Detroit, MI if the tech industry was put on a diet.

Posted by marcos on Apr. 09, 2013 @ 11:09 am

income tax. Sure, it has no sales tax but then anyone can shop there - you don't have to live there, and I stop off at the Medford malls everytime I go see family in Eugene.

But your idea that "SF is pretty so nobody has to work and we can all be prosperous anyway" is deeply flawed. We need a taxx base and we need to encourage business.

Ed Lee understood that and Avalos did not. Result? 60-40 landslide for Lee.

Posted by Guest on Apr. 09, 2013 @ 11:47 am

Oregon income tax:

$0+ $0+ 5.00%
$3,100+ $6,200+ 7.00%
$7,750+ $15,500+ 9.00%
$125,000+ $250,000+ 10.80%
$250,000+ $500,000+ 11.00%

California income tax:

$0+ 1.00%
$7,124+ 2.00%
$16,890+ 4.00%
$26,657+ 6.00%
$37,005+ 8.00%
$46,766+ 9.30%
$1,000,000+ 10.30%

There is no sales tax in Oregon, there is a sales tax in California, yet by your book, Portland is an economic backwater.

Low tax = economic backwater, see the US south.
High tax = economically desirable and thriving, see NY and CA.

http://www.youtube.com/watch?v=G6o881n35GU

Posted by marcos on Apr. 09, 2013 @ 12:14 pm

I'm truly enjoying the design and layout of your website.
It's a very easy on the eyes which makes it much more pleasant for me to come here and visit more often.

Did you hire out a developer to create your theme?
Great work!

Posted by learning english online on Nov. 28, 2013 @ 12:55 am

As explained to you yesterday, Amazon is subject to a SALES TAX on PERSONAL property sales. Completely different tax rules apply to REAL property transactions. The fact Airbnb is getting rents (fees) from local property is what gives the locale taxing power, whether there is "physical presence" or not. Believe me, the execs at Airbnb are much smarter than you. They would not use a stupid sales tax "presence test" for the reason they are not collecting taxes. It they, or their lawyers, used a sales tax argument, no one would trust another thing they said since they are obviously so clueless.

Using the internet doesn't change anything. It's no different than using the phone, a letter, or using an agent. If a company collects rents, or fees connected with rents, from offering REAL PROPERTY in a particuar location, the company will be subject to whatever local taxes appply.

Do you really think a British or French or Chinese investor who collects rents or fees connected with leasing fees from a $100 million office tower or apartment building can avoid local taxes just because they never travel to the building's location and only use the internet to conduct business there?

You need a long break anon. You're a broken record. You're always wrong and you make politicians and business executives seem stupider than they really are.

Posted by Guest on Apr. 09, 2013 @ 8:24 am

Either that, or anon is a product of computer programmers paid to harass this site.

The possiblity that anon is simply such a driven, psychopathic reactionary and such a desperate clown as to spend by far and away more time posting here than all the other frequent contributors combined -- of course under several different screen names to conceal the truly absurd scale of it all -- for no money at all seems too remote to seriously consider.

Posted by lillipublicans on Apr. 09, 2013 @ 9:02 am

I know for a fact they are not because, although I post as Guest, I often reply to others who are also Guest.

Posted by Guest on Apr. 09, 2013 @ 10:15 am

Evidently you want to lose it all over again.

A hotel tax is a form of hotel tax but, because SF wants to charge a higher rate, they have to call it something else. Same happens with alcohol where excuse taxes are collected.

But in each case it is WHERE the item, product or services is located that determines which tax is due. And it does not matter if AirBnB is in San Francisco or Tokyo - it only matters where the room is.

So can SF force a website to collect a SF tax if that website is not in SF? Impossible to say, but highly unlikely if the website is domiciled outside the US - just look at all those online gambling sites offshore.

You can only tax things and people. You cannot tax a website because that doesn't really exist anywhere.

Posted by Guest on Apr. 09, 2013 @ 10:13 am

Right, websites spring into existence sui generis like a photon changes state from particle to a wave and back. There are corporations attached to websites that are legally accountable for their conduct. There are individuals attached to rooms who are legally accountable for their conduct.

Such a world of 100% entitlement and 0% responsibility you want.

Posted by marcos on Apr. 09, 2013 @ 12:16 pm

comments at SFBG at a rate of, say, $10 a post, you will be sending them a check, huh?

In law, jurisdiction and the ability to enforce is paramount.

And SF has no ability to enforce the law or collect taxes on a foreign website. That's why i can play online poker all day long and SF doesn't get a penny in tax. Or order online and pay no tax.

Posted by Guest on Apr. 09, 2013 @ 12:28 pm

Fine way of describing, and nice paragraph to get facts about my presentation focus, which i am going
to present in institution of higher education.

Posted by Nebraska Legal Aid on Jul. 12, 2013 @ 1:07 pm

Actually Expedia does add a charge. If the first price that you see is $100 when you click to book the next screen shows you the $100 and a $15 charge that they explain as "tax recovery charges Expedia pays to its vendors (e.g. hotels)".

And maybe AirBNB could/should do that to make their process easier to use. But the concept that AirBNB should actually pay and file the taxes is just wishful thinking by the Lee/Conway haters. The concept just doesn't exist outside of their twisted world.

Just knowing the tax rates in every municipality in the planet would actually be the easy part. How would they actually file and pay? What is the process for filing TOT payments in Mogadishu? What account does it go into? When? What backup data is required?

Yes, I understand why the Lee/Conway haters would love to cripple one of Conway's investments with a completely unreasonable and unrealistic burden that nobody else in their space has to deal with.

But they need to grow up.

Posted by Troll on Apr. 09, 2013 @ 7:44 am

The haters are not demanding anything of all the competitiors to AirBnB, who also do not collect the tax, and are not in SF so no pressure can be applied.

I've not noticed any separate tax when I've booked hotel rooms online, and assume it is built into the price. But if AirBnB start adding 14% then people will just use their competitiors who do not.

We will drive that business out of SF, out of CA, maybe out of the US. How will you collect the 14% when a Swiss tourist books a SF room thru a Swiss version of AirBnB? Good luck with that?

Posted by anon on Apr. 09, 2013 @ 7:58 am

>"How will you collect the 14% when a Swiss tourist books a SF room thru a Swiss version of AirBnB? Good luck with that"

That's a good point and perhaps it is ONE of the reasons that the host is responsible for the tax. The host, by definition, has a local presence. The web site, AirBNB or its Swiss/Russian/Chinese/Indian equivalent, will probably not.

How many ways can we say that the arguments of the Lee/Conway haters have no basis in reality?

Posted by Troll on Apr. 09, 2013 @ 8:17 am

that AirBnB has a presence only in SF. It's just possible that SF can get AirBnB to collect a tax only on SF rentals, but certainly not on those located elsewhere.

And that would simply drive AirBnB out of SF and to a more tax-friendly location, since they can exist anywhere.

Posted by Guest on Apr. 09, 2013 @ 10:07 am

Troll writes: "What is the process for filing TOT payments in Mogadishu?"

The first thing every business operating in a new location does, whether it be Mogadishu or Podunk, is figure out the local regulations and tax rules for operating there. If the execs of Airbnb are not doing this basic first step that every grown-up business does before it starts operating someplace new, then either the executives are really stupid, really arrogant, or have enlisted law and accounting firms that help them with tax evasion schemes.

It's interesting that many of the new technology whizzes that own and manage companies like Airbnb and Facebook seem too think their brilliance and libertarian philosophies allow them to operate above the law.

Posted by Guest on Apr. 09, 2013 @ 8:08 am

They could only be enforced if AirBnB has a local presence in Somalia or Yemen or wherever.

A corporation like Apple probably does have some operation there, but pure internet businesses would have no need to, nor need to have any business license in those countries.

CraigsList has a sub-site for almost every city and nation on the planet, but there is no way they have a legal presence anywhere but SF.

The law is not about what is written but about what is enforeceable.

Posted by Guest on Apr. 09, 2013 @ 10:18 am

"And maybe AirBNB could/should do that"

So you agree. Case closed.

Posted by marcos on Apr. 09, 2013 @ 9:00 am

Could/should do what?

I was talking about breaking out an estimated tax that they could pass along to the host, instead of the host just bumping up the price 15% (which is the current system).

Are you that lost bankrupt that you have to resort to blatantly taking entirely things out of content? Maybe that is a sign that you should give it up.

Posted by Troll on Apr. 09, 2013 @ 9:18 am

What exactly is this context of which you post?

Posted by marcos on Apr. 09, 2013 @ 9:54 am

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