Airbnb and San Francisco Tax Laws
Airbnb, the online rental marketplace, has had well-publicized clashes with municipalities across the nation involving disputes over tax payments, the duration of rentals and the identification of Airbnb hosts as such. In February 2015, San Francisco passed an ordinance legalizing short-term rentals in the city, but only if landlords agreed to register with the city and to pay a $50 fee in order to obtain a permit from the Office of Short Term Rental.
In July 2016, San Francisco’s Board of Supervisors modified the original ordinance: If hosts failed to comply with the registration requirement, the Airbnb company itself could be fined up to $1,000 a day for every unregistered San Francisco host using its services.
Airbnb promptly launched a counter lawsuit in which it claimed that the Board of Supervisors was proposing to violate the terms of the federal Communications Decency Act. In arguing this, Airbnb was making the claim that it merely acted as a publisher for online rental listings and is in no way responsible for any illegal listings published using its platform.
Airbnb in San Francisco
According to a survey in “The San Francisco Chronicle,” approximately 5,000 rooms, apartments and houses are available for short-term rental through Airbnb in the City by the Bay. Airbnb itself lists approximately 7,000 San Francisco hosts on its website, but according to San Francisco Supervisor David Campos, only 1,400 of these hosts have registered with the city.
Fining the company for its users’ noncompliance with city ordinances could be the incentive that finally persuades Airbnb to make registration part of its terms of service agreements with San Francisco hosts.
Additionally, San Francisco has announced that it will begin assessing a business personal property tax on items like furniture, appliances, linens and cutlery that hosts use while hosting Airbnb guests. This tax will amount to slightly more than one percent of these items’ value
Airbnb and the Affordable Rental Market
Airbnb has been criticized in San Francisco and other cities for its purported effect on the availability of affordable rentals. A report jointly commissioned by MFY Legal Services and Housing Conservation Coordinators allege that illegal rental activities facilitated by the Airbnb platform diminished New York City’s available rentals by 10 percent in 2015.
Affordable housing has become an enormous issue in San Francisco in recent years where the average monthly rent for a one-bedroom apartment is more than $3,500. While Airbnb may be permitting some San Francisco residents to monetize unused guest rooms in their own living spaces, more often it appears to be enabling absentee landlords to turn their investment portfolios into off-the-books hotels.
Airbnb and San Francisco Hotels
San Francisco’s hotel industry is an important part of the city’s economy. A report written by the Bay Area Council Economic Institute notes that in 2013, San Francisco’s hotels paid approximately $300 million in local taxes and provided more than 24,000 local jobs. San Francisco residents filled the majority of these jobs.
San Francisco is one of the locations in which Airbnb collects occupancy taxes on behalf of hosts. The company does so as well for nearby Oakland, San Jose, Santa Clara and Palo Alto. This remittance is paid at the same time that reservations are booked and paid for and amounts to 14 percent of the listing price, including cleaning fees.