Peer to peer rental service Airbnb is holding out for further discussion on San Francisco’s occupancy tax after the city’s Office of Treasurer clarified the regulation last month.
Airbnb says it is cooperating with the city on the occupancy tax and other issues to do with the sharing economy as well as ‘collaborating with the Mayor’s Sharing Economy Working Group’.
The working group was unveiled in late March by San Francisco Mayor Edwin Lee and other senior city officials to develop policies and modernise laws to encourage the growth of collaborative businesses.
The Mayor’s chief innovation officer then called on the Treasurer to halt implementation of its interpretation of the occupancy tax.
However, a spokesman for the Office of Treasurer says:
“Anyone who collects rent needs to collect the tax from the occupant. They asked for us not to issue the regulation but the regulation did not change the law, it was just providing an interpretation. It would not have changed anyone’s obligation.”
He adds that the Office of Treasurer is also participating in the Sharing Economy Working Group but that he is unaware of any proposed new legislation.
“I do know the Mayor is getting people together to recommend ideas.”
Airbnb, meanwhile, is maintaining its position that staying in someone’s spare room is different than staying in a hotel.
“We do not shy away from tax obligations, nor do we believe that all types of private residential rentals should be excluded from transient occupancy tax in all situations. Â We will continue to cooperate with the City and the Tax Collector’s Office and look forward to the opportunity to work together on potential new tax policy and rules for collection for the temporary rental of space in private residences.”
Some have questioned whether peer to peer rental models such as Airbnb and Wimdu should be governed by the same consumer protection and VAT legislation as other businesses.
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About Linda Fox
Staying in someone’s spare room is different than staying in a hotel? Well yeah, until you get charged for it, at which point it’s actually quite similar.
Since they’re competing with hotels, why shouldn’t they be subject to the same rules?
Hi Peter, I don’t think it’s fair for an important reason, hotels get the benefit of all the money paid for accommodation while marketplaces like airbnb get paid a commission. eBay doesn’t get held liable when sellers push fake Prada.
[disclosure, I work for 9flats dot com]
Hi Wei, I don’t really mind who pays the tax – the owner of the property or the company collecting the payment (who could take it out of the owner’s share). But I think the point here is that someone does need to actually pay that tax.
It’s not quite clear from this article – what does AirBnB object to? Them having to pay the tax on behalf of individuals. Or the tax existing at all for private residential rentals? Maybe I misunderstood – it seemed they are trying to ensure that the tax doesn’t apply to their listings at all.
Thanks Peter and Wei,
believe it’s Airbnb wading in on behalf of their members.
@Peter, I agree with you. I’d also work on getting an exemption. Let me rephrase what i said (erroneously) earlier, I wouldn’t agree to be taxed like Walmart if I was eBay, similarly Airbnb doesn’t want to be taxed like a hotel. The business models are entirely different.
@Linda I think that might be a slightly premature conclusion. The SF city treasurer isn’t trying to get hosts to pay the tax.
Thanks Wei
SF Treasurer says those who rent rooms are obliged to collect tax and remit it to Treasurers Office.
It has also said websites that act as merchants must collect the tax. So, one way or the other, the tax must be paid according to the law as it stands.
http://www.sftreasurer.org/modules/showdocument.aspx?documentid=263
I can’t really see why one accommodation provider should get an exemption. I don’t suggest that AirBnB should pay a tax. But the hosts – yes, why not?
If a shopkeeper sets up business on eBay in most countries I would assume they are subject to all the same taxes that normal shops are? Ie, just because a shop sells a product through eBay in Australia rather than through a bricks and mortar shop, it doesn’t mean that sale is not subject to goods and services taxes like all the others.
Hi Linda, thanks for the clarification. I had not read the document before. It is very illuminating. It still seems that it isn’t Airbnb wading in on behalf of its members so much as protecting its own interests. Perhaps you see something I don’t? The law seems very concerned with website companies, and gives scant attention to individual renters.
@Peter nobody is arguing that businesses shouldn’t pay taxes.
I’m suggesting that the tax regime should evolve with the times, that’s all. (eBay vs Walmart taxes)
Thank you both for the illuminating exchanges.
@Wei, I’m still unclear then what AirBnB is objecting to? The merchant having to pay the tax? Or the those renting rooms having to pay the tax?
My original assumption was that they were arguing people renting rooms wouldn’t have to pay the tax. That’s based on this quote in the article: “We do not shy away from tax obligations, nor do we believe that all types of private residential rentals should be excluded from transient occupancy tax in all situations”
That to me strongly implies that they feel some private residential rentals should be excluded.
I’d really like to know what type of rental they feel should be excluded and *why*.