We recently released a report “440 Million Reasons to Tax Airbnb Vacation Rentals,” which was cited in a recent article by Bloomberg BNA. Read their article below for more insight:
Airbnb Inc. would owe $440 million if state-level taxes were paid on current listings in all 50 states, a new report estimates.
Sixty percent of taxes on the short-term rentals went unpaid, as Airbnb only has tax collection agreements with 26 states and cities. The biggest losers are New York, owed $110 million; Hawaii, owed $51 million; and Texas, owed $19 million, according to AllTheRooms.com, an accommodations site that analyzed active Airbnb bookings to project state tax revenue.
“Any changes to current legislation governing short-term room rentals needs to take into account, not only the tax implications of the rental market, but also the wide variety of operational standards that the travel industry has been held to for years,” said the study, released Oct. 24.
The report, “440 Million Reasons to Tax Airbnb Vacation Rentals,” was released three days after Airbnb sued New York over a state law imposing fines on New York City residents who advertise their apartments for unlawful short-term stays ( Airbnb Inc. v. Schneiderman, S.D.N.Y., No. 1:16-cv-08239, complaint filed 10/21/16 ).
A federal judge in San Francisco is considering a preliminary injunction that Airbnb and Expedia-owned HomeAway seek to prevent Airbnb’s hometown from enforcing a law that holds platforms liable for unregistered postings ( Airbnb Inc. v. City and County of San Francisco, N.D. Cal., No. 3:16-cv-03615, oral arguments 10/6/16 ).
“We are confident in our legal challenge, which is based on years of precedent, and believe we will ultimately prevail. No matter what happens in this case, we remain eager to work with the City on rules that work for San Francisco’s middle-class residents who rely on Airbnb as an economic lifeline,” Airbnb said in a statement.
Taxes Paid, Uncollected
Airbnb to date has collected and remitted more than $110 million in hotel taxes globally from more than 200 jurisdictions, company spokesman Alex Kotran said Oct. 25.
“In the cities, counties, states, provinces and countries where we have tax agreements, we collect and remit hotel taxes on every single applicable transaction that occurs on the platform. We are eager to work with any municipality willing to work with us to collect and remit hotel and tourist taxes on behalf of our hosts and guests,” Kotran said in an e-mail to Bloomberg BNA.
Airbnb is projected to collect $177 million this year in taxes, with the remaining uncollected taxes exceeding $260 million, AllTheRooms said.
This post is an excerpt from an article that originally appeared on Bloomberg BNA.
You can read it in its entirety here.