Airbnb makes small admission on tax issue, saying its hosts should pay

http://www.sfbg.com/politics/2013/10/04/airbnb-makes-small-admission-tax-issue-saying-its-hosts-should-pay

by yapcguy • 13 years ago

45 49 13 years ago

testdrive52• 13 years ago

Wow, even after you invest heavily initially to buy a house with your own hard-earned money, you are still supposed to pay the government a cut for renting it? What has this world turned into! Shouldn't YOU be the one who should decide how you spend YOUR money, for renting out YOUR property?

afreak• 13 years ago

By that logic there should be no property taxes and eminent domain should too be tossed out the window.

While taxes suck, property should not be exempt from it otherwise we'll have much further unfair taxation system.

judk2• 13 years ago

Parent was sarcasm, which doesn't work in text.

auctiontheory4• 13 years ago

Perhaps. Did you use any of the resources and infrastructure of the economy and society to earn that money? Did you in any way use or depend on the legal system? The financial system? The roads? Internet? Phones? The financial system? Law and order? Was your education in any way supported by public funds?

If you can answer no to every question, is the same also true for all of your paying customers?

auctiontheory4• 13 years ago

Oops. I must have "the financial system" on my brain tonight.

MAGZine2• 13 years ago

So when are we going to pay taxes for writing OSS? I mean, it was either taught to us by government-subsidized education, or we learnt it from the internet which is also government subsidized. The licenses which you license your software under are a product of the legal climate, generated by the legal system, etc etc etc.

Look, all of this is ridiculous. I'm all for taxing business, but honestly, taxes on the house (the structure itself, the materials) have been long paid, and property taxes are being paid. If anything, I'd think that this would be a zoning issue, which would be handled by municipalities. But even then, I tend to agree that unless if your neighbors are taking issue with it, then taxes/fees should be kept at an absolute minimum, if not zero.

e: on top of that, the money which he used to buy his house (with tax) as well as pay the annual property tax is ITSELF taxed by income tax. How many levels of taxing are appropriate? Honestly.

briandear6• 13 years ago

I pay taxes. That doesn't mean that I owe the government for every accomplishment that I've achieved. You seem to subscribe to Obama's "You didn't build it" statement.

You also fail to acknowledge that a large majority of the spending you've described could be privately run. I'm not suggesting that it should be, however, it's possible some of it could be. If I went to a private school supported by no government money, does that mean I ought to pay taxes to that private school if I happen to become a billionaire? After all, if it weren't for that school, I wouldn't have the education to have built something that made me a billionaire.

Well that's bullshit. I pay a gas tax to drive on the road. I pay a telephone excise tax as well as state and local taxes. I also pay sales tax. I pay property tax, I pay school taxes. I pay taxes on buying and registering a car, I pay taxes when I sell and transfer the title to a car. I pay parking taxes, airport taxes, airline taxes.

I don't owe government a "debt" because of my success any more than government owes me anything because of my failure.

testdrive52• 13 years ago

Dude, cut the crap, will you? I already pay OTHER taxes for that. The roads? I pay road tax. The water? I pay water tax. The financials? I pay income tax.

This is my property which I bought with no help from the government. No subsidies, no discounts, nothing. But why do they want my money again? This is double taxation, dude.

bdcravens• 13 years ago

Pretty sure Donald Trump and the Hiltons feel the same way.

nostromo2• 13 years ago

People have been making short-term rentals on CraigsList for over a decade, yet nobody expects them to collect hotel taxes.

To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.

In fact, it's such a burden, that I'm sure Airbnb will support it in a few years time as a way to raise the barriers to entry on their industry.

freerobby• 13 years ago

Why? Is it any different than Amazon having to research sales tax laws in every municipality it operates in?

learc83• 13 years ago

They don't, only in states where they have a legal nexus until/unless the marketplace fairness act passes the house.

badclient• 13 years ago

Craigslist does not collect payment to facilitate the stay.

They do not offer insurance and serve as mediator during disputes.

They do not operate concierge services.

They operate significantly less like a hotel than airbnb.

nostromo2• 13 years ago

Which is more "hotely" to you:

1) A place where you pay someone to stay overnight.

2) A website that helps people find and pay for #1.

belorn• 13 years ago

Actually, Craigslist do collect payment for facilitate the stay if its an apartment in New York. $10 per listing (http://www.craigslist.org/about/help/posting_fees).

yapcguy• 13 years ago

To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.

A burden? More like a flagrant abuse of the law. It's hard to believe that Airbnb didn't bother researching the law in San Francisco, the very same city the company was founded in.

wpietri3• 13 years ago

I'm sure they researched it. And I'm sure it was a minefield.

Existing laws will be written with hotels in mind. If J. Random Startup went to the city and said, "Hey, we want to try this new thing," at best they'd get ignored. At worst they'd be told they'd have to register each place as a hotel, set up inspections, get necessary permits, and generally slit their own throats.

So strategically, the thing to do is to just ignore the laws, find sufficient technicalities and fig leafs to rebuff government on their first approach, and start the service. If it goes nowhere, then no harm is done. And if, as with Airbnb, it takes off, they're in a much better negotiating position.

Now everybody knows what the service is, and it's easy to see that different laws and regulations will be needed. And regulators can't kill the market off without making a lot of people mad. And the city will end up happy: more capacity to absorb large tourist flows, better experiences for the kinds of visitors that would rather stay in a home than a hotel, more money in the pockets of local citizens. And, of course, soon there will be more tax revenue, too.

briandear6• 13 years ago

Do you even know the definition of a hotel?

jdminhbg• 13 years ago

In fact, it's such a burden, that I'm sure Airbnb will support it in a few years time as a way to raise the barriers to entry on their industry.

A few years? This seems like confirmation that it's happening now.

aaron695• 13 years ago

Why won't someone just set up an alternate site off shore that doesn't charge tax.

I thought it'd lower the barrier of entry.

vacri• 13 years ago

A company researching the markets in which they operate in order to do so legally? Why does AirBnB get a free pass on this one?

mikeash3• 13 years ago

To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.

I really hope that's a joke. Why should they be exempt from the law, exactly?

briandear6• 13 years ago

What law? Here's the definition of a hotel from the NYC Zoning resolution:

[A hotel is:] A building or part of a building in which, living or sleeping accommodations are used primarily for transient occupancy, and my be rented on a daily basis; one of more common entrances serve all such living or sleeping units; and; twenty-four hour desk service is provided, in addition to one or more of the following services: housekeeping, telephone or bellhop service, or the furnishing or laundering of linens.

jasonlotito• 13 years ago

To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.

You mean like hotel companies that research hotel laws and taxes in every country they operate in?

kumarm• 13 years ago

[To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.]

Just because you are Internet Business you are entitled to not figure out tax laws? Airbnb is Billion Dollar company (Valuation wise) and saying they don't need understand laws of country they operate in insane.

briandear6• 13 years ago

We're assuming they don't understand those laws already. We're also assuming that their terms of service don't put that burden on the homeowner. It would actually be the homeowner's responsibility to know the laws within their locale. Airbnb is simply an agency.

madeofpalk• 13 years ago

To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.

Well, considering it's their buisness, isn't it a necessary burden?

That's just like saying a hardware manufacturer shouldnt have to research local wireless compliance laws in each country they enter because it's 'too hard'.

sliverstorm• 13 years ago

Craigslist is very similar to a newspaper listing section. Nobody expects newspapers to collect hotel taxes when someone lists... well, anything. It's just a listing board.

You cannot say this about AirBnB.

eriksank• 13 years ago

With anonymous crypto-currencies thrown into the fray, the next version of AirBnB -- that is undoubtedly already somewhere in the making -- may be entirely off-limits to this kind local government requests. Anybody can see today already that it is "game over" on quite a few older forms of taxation. The internet has started treating money as just information and ,therefore, taxation as just a form of censorship. It will just begin to route around that too.

briandear6• 13 years ago

TLDR; NYC and San Fran, we already pay enough of your bullshit taxes.

Let's take an imaginary trip to New York City..

Fly on an airplane to LGA -- pay Federal Taxes on the ticket approaching 50%. Pay a TSA "fee," pay an "Airport Use Fee," Pay a car rental tax of often 20% on top of the state and local sales taxes. Plus a parking tax of over 19%. If you take a taxi instead, the city charges a $0.50 tax on any trip within NYC, plus sales tax is automatically contained within the fare itself. Plus the driver gets to pay city taxes on the income from that fare as well and gasoline taxes on the fuel used as well as the insanely expensive cost of the taxi medallion itself. We're not even at the hotel yet. Perhaps you find a cheaper ticket flying into Newark? Cool, pay a Port Authority $13 toll just for using the Holland tunnel, though you do get to save on the $0.50 city taxi surcharge.

Once you're at the hotel, however you get there you get to pay the following: New York State Sales Tax, New York City Sales Tax, and New York State Hotel Unit Fee $1.50 per unit per day.

I haven't even had a chance to buy a slice of pizza yet and already I've paid some entity or another a significant amount of money in taxes. That means that the my travel budget of x dollars is now reduced by y dollars, which means that is y dollars less that I have to spend on actually increasing economic activity within the city. Which means that the businesses I would have purchased from have y dollars in fewer sales which means that they will pay both less in sales taxes, but also less in personal and business income taxes. And since I'm getting less value from my total travel budget, the likelihood that I'll travel to NYC any more than necessary is far diminished, thus leading to a overall net loss for the city.

If you notice, anytime there is anything innovative (Airbnb, Uber, etc) within a city, they always are angling for a way to tax it. Perhaps if those lunatics in city government (especially NYC and San Fran) realize that the reason their cities are so expensive is because of the cumulative effect of all of this nickel and diming.

Want affordable housing for "normal" people in NYC? End rent control. There are people in 3 bedroom, nice apartments in Soho, paying $500 per month, and in the same exact building, market rents are $5500 per month because the landlord has to subsidize the loss on the $500 apartment.

And now NYC is crying about losing their occupancy taxes on Airbnb? As a former NYC resident I would like to cry about seeing police officer's driving $90,000 cars off-duty and using their "Police Official Business" placards to avoid paying parking fees. When I worked at General Assembly, I would see high-end Jaguars and Cadillacs parked in front of our building on 23rd street with police placards. While our unemployed students would have to go downstairs every few hours to stuff yet more money into the meter.

NYC and San Francisco -- you can go suck an egg when it comes to collecting an occupancy tax for Airbnb.

Airbnb makes small admission on tax issue, saying its hosts should pay

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