Does Mayor Lee support Airbnb dodging its $1.8 million tax debt to SF?

Is Mayor Ed Lee more loyal to the city or his campaign contributors?
Tim Daw

My story in this week's Guardian about how Airbnb appears to be refusing to pay the hotel taxes it owes to the city has gotten a lot of attention. But I'm still getting stonewalled by representatives from the company and Mayor Ed Lee, who apparently refuses to take a public stand against corporate tax evasion, even when it means thousands of San Franciscans could get stuck with an unexpected tax bill.

How much money are we talking about? According to a study that Airbnb commissioned and publicized late last year, its hosts in San Francisco collect $12.7 million from their guests every year. That means that if the company was charging the 14 percent Transient Occupancy Tax – as the Tax Collector's Office last year ruled that it must – it would be paying the city nearly $1.8 million annually.

But that doesn't seem to be happening, although only Airbnb can say for sure, which is why its spokespeople have been dodging my questions for more than a week. As I reported, taxpayer privacy laws prevent city officials from disclosing how much individual businesses pay in local taxes, but we do know Airbnb doesn't add the TOT to the online transactions it facilitates or specifically encourage its San Francisco hosts to collect the taxes (even though the tax codes make the hosts and Airbnb jointly responsible for this growing debt to city coffers). And with the company charging 6-12 percent per transaction, it's a safe bet that it isn't simply paying the taxes itself.

What makes this particular case of corporate tax dodging even more interesting is the fact that Mayor Lee has a close connection to this particular San Francisco-based corporation. Venture capitalist Ron Conway is a top investor in both Airbnb and Mayor Lee's political campaigns, creating a potential conflict-of-interest in Room 200. Last year, Mayor Lee personally lobbied against the interpretation by the Tax Collector's Office, and now he appears to be silently backing Airbnb's resistance to paying its taxes.

Last week, when I was trying to get a comment for Lee spokesperson Francis Tsang on Airbnb's apparent tax dodge, he replied, “It's an incorrect assumption that Airbnb and hosts haven't been paying any transient occupancy tax..” Of course, because of the taxpayer privacy laws, Tsang can't actually support that statement and I responded by laying out the evidence that the city is getting stiffed by Airbnb.

Then, he and Airbnb simply stopped responding to my questions, even though I've made repeated inquiries and asked only whether Mayor Lee was willing to make a public statement calling for a major San Francisco corporation to meet its local tax obligations. And in the interests of fully transparency, I'll close with the email that I sent to spokespersons for Airbnb and the Mayor's Office on Wednesday as my story came out, along with their emails in case you want to push for answers yourself.,,

Dear Airbnb and mayoral spokespeople,

Since I couldn't get responsive answers from any of you about why Airbnb isn't collecting the Transient Occupancy Tax from its guests, I wanted to forward the link to my story on the topic in our latest issue ( and to let you know that I will continue covering this issue in the Guardian and our sister newspapers until you address it publicly.

Because of privacy laws that limit the Tax Collector's Office from addressing this directly, only Airbnb can say whether they're paying any of the hotel taxes that the city last year conclusively ruled that they owe. As I reported in my story, that tax obligation is shared jointly by Airbnb and its hosts, who don't appear to have been warned of this by the company, making this an issue of consumer protection as well as corporate greed.

Will the Mayor's Office make a public statement opposing tax evasion? Will it stand up for San Franciscans who may be unwittingly stuck with the tax bill by Airbnb? Or will Mayor Lee stick up for a tax-dodging corporation funded by the same billionaire that funds his political campaigns? And how will people feel about San Franciscans and the city treasury paying for his political ambitions?

These are all questions that I plan to air and explore in the Guardian, and I think that our readers and the general public deserve answers to those questions. If there are reasons why Airbnb guests aren't being charged the TOT, some other arrangement that has been made, or some other complex reasons why Airbnb feels it can't comply with last year's ruling by the Tax Collector's Office, I'll be happy to hear it and let you make your case to our readers. But I don't think that continuing to stonewall me is going to be a viable strategy for any of you. I hope to hear from you soon.


Posted by Guest on Mar. 23, 2013 @ 9:07 am

Is your name on one of the foundational documents of the WWW? I did not think so. You're all manure and no horse.

Posted by marcos on Mar. 23, 2013 @ 9:45 am

you are judged here solely by the quality of your argument and, of course, how little someone obfuscates and deflects when losing a debate.

Posted by Guest on Mar. 23, 2013 @ 11:00 am

You are *always* just so lame.

anon, nobody except your alter ego will ever believe that you made -- or won -- any argument.

You spout insults, lies, and false analogies, and when they are shot down you trot out some three-syllable word you barely know how to use in this excruciatingly lame display.

What an amusing ass-clown you are. Please don't change.

anon = Guest = Bold Lying Guest = False Erudition Guest = Anonymous = anonymous = D.native = Troll = one pathetic example of internet troll.

Posted by lillipublicans on Mar. 24, 2013 @ 8:02 am

rather than engage in endless petty abuse against anyone whose political views disagree with yours.

Posted by anon on Mar. 24, 2013 @ 9:13 am

We are not abusing you because your political views differ from ours, we are abusing you because you're a worthless troll and we derive enjoyment from that kinda like swatting at cockroaches.

Posted by marcos on Mar. 24, 2013 @ 9:30 am
Posted by marcos on Mar. 24, 2013 @ 8:45 am

text that you claim supports some prior bragging on your part.

Anyone who feels that they have to toot their own horn as much as you do is typically a low-achiever. Talent doesn't need to brag. You're too whiney and self-absorbed to be succeesful.

Posted by Guest on Mar. 24, 2013 @ 9:17 am

control-f does the trick, obfuscating loser.

Posted by marcos on Mar. 24, 2013 @ 9:27 am

about his net worth on the comment pages of another article.

Posted by Guest on Mar. 24, 2013 @ 9:53 am

You impugned my economic contributions and you were proven wrong, troll.

Posted by marcos on Mar. 24, 2013 @ 10:06 am

but to the comment posted by "Guest on Mar. 24, 2013 @ 9:17 am."

Either the website or I made a mistake.

Posted by Guest on Mar. 24, 2013 @ 10:57 am

some alleged "achievements", and trying just a little too hard to convince us.

Posted by Guest on Mar. 24, 2013 @ 12:27 pm

...and an unemployment rate of about 25% for young people (60% in Spain and Greece).

Of course, since Marcos isn't young, he could care less.

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 7:23 am

Just as I live in an economically productive blue coastal city now, I'm considering making a move to an economically productive and sufficient northern European locale.

Shocking as it may be, there are desirable places to live where tech is but one component of a diverse economy and there is no need for government to prostrate itself before corporate suitors like a cheap whore.

Funny how those who complain that San Francisco preservationists want to turn SF into a museum that will become more expensive, but the European City Center where I'm looking has strict zoning that would give libertarian housing boosters a coronary, yet the apartment rents are 2/3 in 300 year old houses of what they are here in SF for contemporary craptacular condoliciousness.

Posted by marcos on Mar. 23, 2013 @ 7:49 am

Sounds perfect. Best of luck.

Posted by Guest on Mar. 23, 2013 @ 8:20 am

Thanks. I just might have hit the proletarian jackpot. I did not seek this, I am being aggressively recruited. It is like software development is becoming nursing, you can work almost anywhere.

Posted by marcos on Mar. 23, 2013 @ 8:51 am

be happy there. But, heck, it might turn you intyo a right-winger when you see what real sociualism is like, rather than the half-cocked, half-assed version that SF has.

Posted by Guest on Mar. 23, 2013 @ 9:09 am

Still gotta work for a living, and I'd need to undergo extensive Alp replacement therapy to cope with Sierra Nevada withdrawal.

That would really suck with only six weeks of paid vacation and a bonus to spend on it each year.

Pay, expenses and taxation appear to be almost a wash, all said and done.

Working one's way back in the alphabet: Zermatt, Warsaw, Vienna, Venice...

Posted by marcos on Mar. 23, 2013 @ 9:19 am

You'll be back in a month, assuming you even go, which I doubt.

Seems to me you're one of those "grass is always greener" restless types. You'll be this miserable wherever you are.

Posted by Guest on Mar. 23, 2013 @ 11:01 am

Yeah, after graduation, I moved out to SF sight unseen and only stayed here for almost 24 years.

The naysayers then said that I'd return to Texas, tail between my legs, in short order.

Posted by marcos on Mar. 23, 2013 @ 11:29 am

"Just as I live in an economically productive blue coastal city now, I'm considering making a move to an economically productive and sufficient northern European locale."

You mean you're not moving to Portland? Yay!

Sure you can get a job there? I know that France, for example, makes it very difficult for foreigners to get permission to work.

Of course, you could always move to Cyprus and get your bank account confiscated, on the orders of the EU.

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 8:34 am

And the Fed printed up, what, almost $20,000,000,000,000.00 in freshly produced dollars to satisfy the banks, and that is never going to have any effect like confiscating US bank deposits, nosiree, sucker!

Posted by marcos on Mar. 23, 2013 @ 8:41 am

Just wait until the State of California decides it needs a big chunk of your bank account.

Remember, "taxes" aren't covered by deposit insurance!

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 8:59 am

I would rather pay twice as much in taxes in Europe than I would pay American taxes.

Posted by marcos on Mar. 23, 2013 @ 9:05 am

Why do you hate America?

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 9:19 am

Europe can vary from 40% (UK) to 75% (France). Many are at around 60%. And of course their equivalent of a payroll tax as well.

Posted by Guest on Mar. 23, 2013 @ 9:25 am

"I would rather pay twice as much in taxes in Europe than I would pay American taxes."

Wait until Marcos finds out he's still liable to pay US taxes, even if he works in Europe.

Time magazine:

"Despite living abroad, expats are still required to pay income taxes as well as taxes on their capital gains – though there are deductions available to expats (most notably something called the Foreign Earned Income Exclusion) that can reduce the amount of this tax to zero. The US is the only country, aside from Eritrea, that imposes such taxes on its citizens abroad."

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 9:39 am

I would relish the opportunity to pay higher European taxes first and then deduct all of that from my income on my US tax return so that I'd no longer have to fund a violent imperial prison state with my taxes.

Posted by marcos on Mar. 23, 2013 @ 9:43 am

"I would relish the opportunity to pay higher European taxes first and then deduct all of that from my income on my US tax return"

You really need to talk to a tax lawyer. Your ability to deduct "all of that" from your US tax return may be considerably more limited than you think. (For example, there are caps on how much foreign income you can shelter from US taxes.)

And remember to report all your foreign bank accounts to the US government, or face huge penalties...

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 9:55 am

BTW, to qualify for the Foreign Earned Income Exclusion, you have to spend 330 days a year abroad. Hope you didn't want to spend more than a month a year back in the US, and you should consult a tax lawyer to find out how the rules work - you wouldn't want to move to Europe, work for ten months, and find out that you didn't qualify for the exclusion the first year because it was only ten months outside the US.

I knew people who worked abroad who had to be very careful about how much time they spent in the US, due to this rule...

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 9:52 am

The only item on my agenda in the US is a few nights in the Yosemite High Sierra Camps this summer, I won that lottery. If I win the Half Dome lottery too, then I'm certainly coming back for that, but with the rest of Europe at my doorstep, why otherwise would I come back to the US?

As this ends up unfolding, I'll take care to consult a professional, thanks, as you are correct, it is very complicated.

Posted by marcos on Mar. 23, 2013 @ 10:08 am

I suspect, however, that you will miss us. We'll know if you carry on posting here how homesick you get. You're probably too old to make a go of this anyway.

Posted by Guest on Mar. 23, 2013 @ 11:06 am

I'm getting too old to be bicycling in this death trap of a city.

Posted by marcos on Mar. 23, 2013 @ 11:45 am

SF RE at all time high, stocks at all-time high, millions of jobs created, and the dollar hasn't evn been that weak.

Obama was correct to continue the economic policies of W.

Posted by Guest on Mar. 23, 2013 @ 11:03 am

"Just as I live in an economically productive blue coastal city now, I'm considering making a move to an economically productive and sufficient northern European locale."

That city doesn't have a rapidly growing Muslim population, does it? Amsterdam, for example, has an increasing problem with gays being assaulted by local "youths", as Amsterdam becomes more "diverse". You might want to check the local demographic trends...

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 8:37 am

Your xenophobic paranoia knows no bounds, does it? I'm sure you're too terrified to venture into our Mission neighborhood except on weekend evenings when it is overrun by those of insufferable conceit and there is safety in numbers.

Posted by marcos on Mar. 23, 2013 @ 8:43 am

It's pretty funny that you want to move to Europe, just as the European social and financial model is collapsing.

So noting the increasing number of assaults on gays in Amsterdam is "xenophobic paranoia", huh? Got it.

Because Slotervaart in Amsterdam is **just** like the Mission!

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 23, 2013 @ 8:58 am

The European north is quite capable of taking care of itself irrespective of how the euro works out.

Posted by marcos on Mar. 23, 2013 @ 9:07 am

Here's a quote from an EU economic paper:

"Youth unemployment rates are generally much higher than unemployment rates for all ages. High youth unemployment rates do reflect the difficulties faced by young people in finding jobs. However, this does not necessarily mean that the group of unemployed persons aged between 15 and 24 is large because many young people are studying full-time and are therefore neither working nor looking for a job (so they are not part of the labour force which is used as the denominator for calculating the unemployment rate). For this reason, youth unemployment ratios are calculated as well, according to a somewhat different concept: the unemployment ratio calculates the share of unemployed for the whole population. Table 1 shows that youth unemployment ratios in the EU are much lower than youth unemployment rates; they have however also risen since 2008 due to the effects of the recent crisis on the labour market."

Here's the U.S. Bureau of Labor Statistics breakdown of unemployment by age -- note that the group considered does not include fifteen year-olds, and that U.S. data for 16, 17, 18, 19 is comparable to your claim:

Are social safety nets better in the U.S.? Maybe that's why so many kids are forced to take whatever job they can find to help their families make ends meet.

In any case, your statistics can't be expected to match-up any better than what I've found.

Posted by lillipublicans on Mar. 23, 2013 @ 7:57 am

The EU is imbalanced just like the dollarzone is imbalanced. The EU has the European north that generates surpluses and the European south that does not generate surpluses. Those surpluses burn holes in the coffers of the north which then package up those surplus Euros and lend them to the south as Euro debt. To do otherwise would mean to sell those Euros for foreign exchange and that would mess with exchange rates. Keeping those transactions internal to the Eurozone prevents that albeit at the cost of exacerbating internal imbalances. The problem is that the PIIGS cannot print their own Euros and are forced to liquidate to pay the north or default, which is happening in slow motion.

Here in the dollarzone, there are also imbalances, largely between wet and dry, where if your county touches water, you're generally blue and if it does not, you're red. The redneck riviera excepted. See:

Since states are prohibited from both running fiscal deficits (capital debt is okay) and from printing dollars to cover their shortfalls, those deficits are covered de facto by tax transfer payments, entitlements if you would. The map tells the story.

The political difference is that the northern Europeans are generally tighter on fiscal discipline than the European south and by selling debt are charging them for the privilege of receiving temporary debt transfers.

While in the US, the tax taker states are the proponents of economic libertarian capitalism while the tax payer states are generally more liberal/progressive economically.

I'm not sure what the way out for the EU is, but at least they don't have to engage in psychosurgery to disarm a cartel of states that is extorting the productive regions via voodoo economics.

Posted by marcos on Mar. 23, 2013 @ 8:11 am

Sorry, that €225/mo would be for both of us, the monthly premium for individual health insurance would only be €100 because there are no parasitical for-profit private insurers to suck up 1/7 of 1/7 of the economy.

Posted by marcos on Mar. 23, 2013 @ 8:00 am

is cheaper than here. And the best healthcare there is as good as the best here. The problem is more that far fewer people get the best care there.

Whenever you make something free, demand increases to the point where resources become stretched. This means that they suffer from the "Canada Effect" i.e. long lines waiting to receive treatment. Canada solves this by sending their patients to the US, and of course paying a lot for that. Europe "solves" that by making people wait.

The 40-odd million Americans who do not have insurance would be better off in Europe, as they will at least get some care. But the rest of us, who carry vocational health insurance, are better off here. Not just because there is no waiting, but because you can choose your specialist. In Europe, it runs more like a HMO, where a GP sees you first and then tells you which specialist you will see.

Posted by Guest on Mar. 23, 2013 @ 9:18 am

Health care in Europe is not free, its financing is socialized and subsidized and not for profit which cuts out the intermediary leeches and the expense of subsidizing them.

Posted by marcos on Mar. 23, 2013 @ 9:44 am

delivery but, as you note, you have to pay for it thru higher taxes and of course the value of all that time spent waiting for treatment. The average level of care is also inferior.

Whether allowing a profit to be made is net positive or negative depends on whether you believe that socialized anything is betetr or worse. Based on my experience of living in six or so countries, inlcuding Europe, I'd say the profit motive adds value. Adam Smith was onto something.

Posted by Guest on Mar. 23, 2013 @ 10:58 am

This one's original comment needs to be stripped down to the frame. When all the parts are individually examined, they can readily be seen for exactly what they are: reactionary fictions and other brown-shirtted pablum.

These type of commenter throw so much bs into their comments that in refuting what is -- ostensibly -- their main point, the answerer is liable to unwittingly seem to be validating any score of glib assumptions and patently false suppositions.

It has to be pointed out that Transpositional Letters Guest above is expert at this technique, so I'll point out that I'm only attempting to destroy this one small asect of the troll's deposit:

Outcomes are better in Europe so health-care is better.

Now what I really want to know is the answer to this: if I switch two letters around in my comment, does that result in an extra $.050 being deposited into somebodies Paypal account?

Posted by lillipublicans on Mar. 23, 2013 @ 12:04 pm

or substance on the topic. At least Marcos tries to debate - you launch straight into the personal attacks because you have nothing else.

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Posted by on Aug. 05, 2013 @ 6:06 pm

to be quite unable to tolerate any criticism or correction of their positions without lapsing into bouts of righteous indignation.

By and large, I'd assess the moderate criticism of SFBG positions here to be calmly and civilally made, while the over-reactions to them are anyhting but.

One would normally expect political extremists, on either side, to be elss tolerant than the moderate majority, and so it is here too.

Posted by Guest on Mar. 22, 2013 @ 4:25 pm

There is a the grandma who rents out her son's old bedroom once or twice a month to help pay the bills

And then there is someone who owns an 8 unit building and figures out that they can make more money using it as a hotel alternative.

The second scenario is a valid business that the city should look at it and collect whatever taxes are legal and can be realistically enforced.

But again, this is whole thing is just another Steven Jones knee jerk reaction after sensing the ability to sucker punch Ed Lee.

This is the same Steven Jones who published 'The America's Cup Is Killing People!' (his emphasis, not mine) after a 46 year old died of a heart attach during the Alcatraz triathalon.

And, get this, after people called him out on it he said that he was a 'journalist'.

Posted by Troll on Mar. 22, 2013 @ 3:25 pm