Most cities and states have accepted they won’t be able to get rid of Airbnb though not for lack of trying. Now that the home-sharing site is here to stay, a few states are at least trying to make some money off of it.
New Jersey is the latest state to try to impose taxes on Airbnb, which is not subject to the same taxes and fees as hotels and motels. In the Garden State, members of the assembly want to extend the 7 percent sales tax and 5 percent transient accommodation fee long in place at hotels to “short-term rentals rented through a transient space marketplace,” aka Airbnb. The summertime legislative push comes during peak vacation rental season for the Jersey shore.
It’s a more realistic approach than that of neighboring New York, which has tried to ban short-term rentals on Airbnb entirely.
Like New Jersey, Massachusetts is trying to tax Airbnb, in this case with a 5.7 percent excise tax. The effort initially had the support of Massachusetts Gov. Charlie Baker until he backtracked to maintain his fiscal-conservative cred.
In Hawaii, an effort to tax Airbnb came to a halt when the governor vetoed it.
As a whole, cities and states are accepting that Airbnb isn’t a fad and are moving toward finding the best way to live with the home-sharing company, rather than eliminate it.
If they can make money from its ubiquity, then even better. Forcing Airbnb to collect taxes on behalf of its hosts is the easiest way to do that.
“At a time when cities are working hard to stretch every dollar, Airbnb can be a valuable partner in strengthening city economies.”
So far, cities rather than states have seen the most success in taxing the company. About 200 cities worldwide have some sort of tax in place that applies to Airbnb.
Airbnb says that it will work with states on their legislative proposals.
“We support efforts that make it easier for our community to pay their fair share of taxes and look forward to working with the legislatures in Massachusetts and New Jersey to make this happen,” Airbnb spokesman Christopher Nulty said in a statement.
In June, Airbnb announced that it had collected $85 million in taxes from cities since 2014.
“At a time when cities are working hard to stretch every dollar, Airbnb can be a valuable partner in strengthening city economies. Weve worked together with cities around the world to collect and remit hotel, occupancy and tourist taxes on behalf of our hosts and guests,” the company wrote.
Airbnb has also said it would work to modify tax laws to better suit “regular people who share the home in which they live,” as the company puts it, rather than hotels.
And while the company touts its contribution to communities through its tax dollars, those tax dollars came out of contentious relationships.
San Francisco was one of the first cities to impose taxes on Airbnb, and since then the city and the company have sparred publicly over regulations. This June, Airbnb sued San Francisco over an ordinance that would fine hosts not registered with the city.
Chicago is even using the revenue from Airbnb’s taxes for its work on homelessness, a policy aligned with the criticism that Airbnb cuts into cities’ affordable housing.