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

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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.

kim@airbnb.com, francis.tsang@sfgov.org, christine.falvey@sfgov.org.

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 (http://www.sfbg.com/2013/03/19/airbnb-isnt-sharing) 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.

Comments

that AirBnB isn't really the issue here at all, but rather that SF should be pursuing individuals to do short-term rentals and see if they can actually enforce collection (I doubt it).

But no, it's just yet another cheap shot at a mayor with a 65% approval rating who thrashed Steven's candidate in the last mayoral election.

Cheap, snide and self-serving.

Posted by anon on Mar. 22, 2013 @ 3:57 pm

AirBnB so sublet part or all of their rent-controlled units?

Are you comofrtable with AirBnB complying with your request even if it means those tenants will lose their rent-controlled housing?

Are you aware of what percent of SF AirBnB hosts are tenants versus landlords? It seems to me that the wealthy would have no need to risk sublets, and that most people who do this are low to moderate income, and very possibly exactly the types of SF'er that you normally fawn and pander over.

I do not think you have thought this through.

Posted by Guest on Mar. 22, 2013 @ 4:20 pm

I think that AirBnB should open its books... so we can identify every person in a rent controlled unit illegally subletting their unit out via AirBnB. Once identified, we can immediately cut off their eligibility for rent control, and evict them - thus freeing up more housing for actual tenants.

Open the books!

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 22, 2013 @ 5:35 pm

It's the whiney little rent-controlled urchins who are gaming the system.

How many tenants will be evicted as a result of Steven's great campaign?

Posted by Guest on Mar. 22, 2013 @ 6:08 pm

...for the hotel rooms it facilitates?

If they do, then Airbnb should definitely be on the hook as well.

If they don't, then you need to STFU or start bitching about THOSE companies before chasing after tax dollars from anyone else.

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

and so of course Steven has no interest in whether they collect the tax.

I suspect that they do, but only because they deal with real hotels, who cannot avoid the tax. It's still up in the air if the hotel tax is due if you let your cousin stay in your spare room in exchange for a cash gratuity.

Steven's article is a muddled mess - part about Lee, part about whether third parties can and should collect taxes, and part about people who sub-let rooms in their homes being very unhappy about being treated as if they are a hotel, and therefore ducking the tax.

I think he is wrong on all three.

Posted by Guest on Mar. 23, 2013 @ 12:37 pm

Without going into the minutia of tax law and the various side flights of fancy by "Guest" and other regulars here, who I would never take as reliable over the SFBG reporter, riddle me this:

Has Mayor Lee ever met a corporate entity or billionaire he DIDN'T like? From China to Timbuktu this mayor has laid out the red carpet for anyone with the big bucks. That's not necessarily bad but it often is, especially when the person or entity ends up stiffing the city. He's not a good negotiator for SF's broader interests and that's a fact. We've seen it over and over again in the short time he's been in office and we'll no doubt continue to see it. I don't have time to document all his squishiness and malfeasance but you can find it well documented on for example Larry Bush's Citireport.

Posted by Barry Eisenberg on Mar. 23, 2013 @ 5:15 pm

why would it surprise you when he proceeds to run the city in exactly that way? Wouldn't it be a bigger problem if Lee did NOT do what he promised to do?

Turn your rhetorical question around and we get exactly what I said about Avalos in the mayoral election, when I correctly predicted that he would lose to Lee by a country mile:

Has Avalos ever met with a corporate or billionaire at all, let alone with one he likes?

The answer, of course, is no which puts him at odds with most SF voters who actually want SF to have a great economy, and not be a second-rate basketcase.

Posted by Guest on Mar. 24, 2013 @ 9:20 am

Did Steve Jones pay the hotel tax when he rented out his place to some hippies when he was at Burning Man? WHY DID HE NOT DISCLOSE THIS IN THIS ARTICLE LIKE HE DID IN THE OTHER ONE HE WROTE FOR THE BRUGMANN GUARDIAN?

LIAR!

Posted by Guest on Mar. 24, 2013 @ 8:05 pm

... anon doing everything possible to get banned; "put out of its misery."

It'd be an act of mercy, I tell you.

Posted by lillipublicans on Mar. 24, 2013 @ 8:31 pm

nobody knows who he or she is?

Posted by Guest on Mar. 25, 2013 @ 5:42 am

the State tax due on that. But presumably he thinks that is somehow different.

Posted by Guest on Mar. 25, 2013 @ 5:44 am

So, where is Jones' evidence that he's paid use taxes on his Amazon purchases?

You're required to do that, you know.

Tax evader.

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 25, 2013 @ 8:46 am

that we can all confirm that he has declared his out-of-State purchases.

So far, he was not been returning my phone calls.

Posted by Guest on Mar. 25, 2013 @ 9:44 am

Apparently you've all run out of arguments to discredit my reporting, so you've now chosen to attack me with ridiculous arguments, as if that has anything to do with whether Airbnb is stiffing the city for $1.8 million a year. I've been quite open about my own use of Airbnb, and I even included a link to that article in "Airbnb Isn't Sharing." As for your other irrelevant accusations, in the spirit of open public debate (and hopefully setting an example for our mayor and his corporate buddies), I'll go ahead and answer. I'm not much of an online shopper personally, but I have been selling my book, The Tribes of Burning Man, through my website and I easily figured out how to add the California sales tax onto each purchase, which I then pay to the Board of Equalization every January. So I'm not a tax cheat -- and whether I pay my small pittance in taxes is totally irrelevant to whether a multi-million-dollar corporation headquartered here and with financial ties to our mayor is blatantly and unilaterally refusing to pay millions of dollars in taxes that the city needs and which our top elected official with authority over taxes clearly says they owe. That's the issue, no matter how much Tony Winnicker -- the mayor's liaison to the tech community and a known troll on this website and post -- wants to divert people's attention away from the calculated, politically corrupt, and morally indensible acts of ongoing tax avoidance.

Posted by steven on Mar. 25, 2013 @ 10:14 am

Wow, so our tax dollars that Airbnb is not paying, are funding a troll posting on this site?

I think I see the patters of a deal emerging, as in dropping Airbnb's tax liability to $1.6m as the City relieves itself of the burdens of Winnicker's salary, health benefits and pension.

Posted by marcos on Mar. 25, 2013 @ 10:40 am

Certainly nothing that Steven said.

I'm still waiting to see anyone furnish proof that a third-party broker is responsible for a first party tax liability. That implies that, if I do not pay this poxy and egregious hotel tax on my sublet, that AirBnB are liable for it instead?

That's nonsense. It's my liability, not theirs. And my choice whether to declare it or take my chances.

Posted by Guest on Mar. 25, 2013 @ 12:04 pm

"market makers" are never responsible for anything.

Posted by marcos on Mar. 25, 2013 @ 12:30 pm
Posted by Guest on Mar. 25, 2013 @ 12:43 pm

Steven, interesting that you referenced your prior articles - from "The problem with the sharing economy":

"Something Airbnb doesn't tell you when you sign up is that you may be breaking the law and/or your lease (its spokesperson says that warning is in its terms of service, but I never saw it). Frankly, I knew that my lease didn't allow subletters, but my building is big, I really needed the money, and I figured that I wouldn't get caught, a calculation that many thousands of customers of Airbnb and other companies regularly make as well."

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 25, 2013 @ 10:50 am

So you admit that you cheat?

Posted by marcos on Mar. 25, 2013 @ 10:56 am

pass the hat

Posted by Guest on Mar. 25, 2013 @ 12:28 pm

LOL. The quote is Steven's quote, not mine.

Another quote from Steven:

"By the end of the year, it began to dawn on me that this business model wasn't as simple as it initially seemed, triggered partially when the company sent me a 1099 federal tax form for the thousands of dollars I earned in 2010. Oh yeah, taxes, shit. So I paid my state and federal taxes on what had once seemed like free money"

Because I'm **sure** Steven would have paid the taxes if he hadn't gotten the 1099. I'm sure he paid the hotel taxes too on the "thousands of dollars I earned in 2010".

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 25, 2013 @ 12:35 pm

Steven got caught and some other people have not been caught, so Steven is the thief who turned into an informer and enforcer?

Throw in an opportunity for a cheap shot at a popular mayor and, bingo, he's deconstructed.

Posted by Guest on Mar. 25, 2013 @ 12:46 pm

I frankly discussed my fairly typical experience with Airbnb for the benefit of our readers and the city as a whole, raising issues that complicate the simplistic view of the "shareable economy" that many self-interested parties want to promote. Nobody "caught" me, and if anything, I took a personal risk for the benefit of a good public discussion, which I believe in. At the time I used Airbnb, the issue of whether hotel taxes applied to shared housing wasn't settled and hadn't even been addressed publicly by the Tax Collector's Office. That happened last year, with everyone given a chance to weigh in and make their arguments, and San Francisco's top tax official settling the question. As I've said before, if Airbnb and anyone else objects to that decision, they can get the Board of Supervisors to change the law (which didn't happen partially because tenants groups and the Hotel Council support the ruling) or they can make it an issue the next time Jose Cisneros runs for office. But it's dishonest, anti-democratic, greedy, and (given the complicity and self-interest of Mayor Ed Lee) corrupt for a corporation to just decide that it's not going to pay its taxes and expect that settles the matter because it has friends in high places.

Posted by steven on Mar. 25, 2013 @ 4:12 pm

litigated. All SF's "top tax official" has done is give us his opinion which, not surprisingly, is in favor of SF being able to tax casual stays. It is clear to me that it was the intent of the original framers of this tax was regular hotels and not casual stays.

So it is clear to me that, when you decided to occasionally rent out a room short-term, you were not engaging in the hotel trade, and nor is it obvious that the type of taxes imposed on hotels almost everywhere you travel (hotel guests do not vote, and so are the perfect sucker for a tax like this) were never originally conceived as applying to people who elect to occasionally share their rooms.

In fact, Steven, I wish you had taken up your example as a test case to try and get this heinous tax rule overthrown, so that SF'ers can again enjoy the company of having foreign visitors without getting shafted by this egregious tax. you could have run a campaign on SFBG against over-zealous taxation by faceless bureaucrats who do not understand the sharing economy.

But I get that you're really just looking for a cheap shot at Lee here.

Posted by Guest on Mar. 25, 2013 @ 4:36 pm

Judge: Hey AirBNB, the City says that you owe these taxes. Do you disagree?

AirBNB: Yes, you honor. Here is a partial list of 15 other businesses that we compete with. Expedia, craigslist, ...The city is making no claims against them and is in fact being arbitrary and trying to place us in a severe competitive disadvantage.

Given the capricious nature of the city's activity we will have no recourse other than to sue the cr*p out of them if they don't either treat us like the rest of our category or leave us alone.

It might help, Steven, if you realized that not everybody is possessed with an all encompassing hatred of Mayor Lee. That is just YOUR problem. His approval rating is 60%, according to not one but two recent polls. He is creating wealth and jobs and people love the guy.

Sorry!!!!!

Posted by Troll on Mar. 25, 2013 @ 4:41 pm

to the latest opinion poll, and even higher than the 60% he got in his easy election win over Avalos.

Posted by Guest on Mar. 25, 2013 @ 5:05 pm

First of all, I'm surprised that our conservative trolls believe nothing is settled until the trial lawyers and appointed judges have decided the matter, rather than having faith in the other two co-equal branches of government headed by elected representatives. But knowing how greedy corporations operate, you're probably right that Airbnb will drag this into the courts. Yet the facts you're presenting to this fictional judge couldn't be more inaccurate, as you'd know if you spent a little time reading the articles that you're commenting on. The hotel tax does indeed apply to Expedia, Travelocity, and other Internet-based companies -- and San Francisco is also fighting them in court over their practice of paying their hotel taxes on the steeply discounted room rates they get from hotels because of their mass bookings rather than the rates they actually charge to customers. Airbnb is being treated the same as its competitors, which should be the essence of free market capitalism, except that's not actually the system that we operate under. Instead, corporations usually look to cheat and game the economic system, often with the help of politicians like Mayor Ed Lee whose campaigns they fund. I don't hate Ed Lee or anyone, but it's the job of journalists to show the public how these self-interested politicians operate so they can make informed judgements rather than simply believing the bullshit espoused by you, Tony Winnicker, and the other flaks paid by taxpayers to deceive them on this message board and other forums around the city.

Posted by steven on Mar. 26, 2013 @ 10:12 am

be based on the ACTUAL cost of the room but rather on some inflated "rack rate"? That's insane. Imagine if that approach were used for sales tax, income tax etc, where it is based not on the actual value of the transaction but on some taxman's opinion of what it should be worth?

But anyway, Expedia and Travelocity are different because the entities that sell their rooms thru them are directly sibject to hotel tax, and include that tax as part of the room rate. Expedia etc. do not have a separate category for the tax - all the customer sees is the toal cost.

But your idea for AirBnB is to have a separate category for the tax, which rather implies that AirBnB, and not the host, is liable for it. So the analogy breaks down. the true analogy with Expedia is that the host includes the 14% in the rate, and then hands that over to the city (or not, of course).

Posted by Patrick Monk.RN. on Mar. 26, 2013 @ 10:26 am

>"The hotel tax does indeed apply to Expedia, Travelocity, and other Internet-based companies"

OK Steven, well that is news to Expedia, anyway. In another comment I posted the section of their TOS that specifically said that they are not responsible for paying transient stay taxes. Yes, they will collect them based on a percentage supplied by the hotel (called a 'tax recovery charge') and pass that amount on to the hotel so that the hotel can file their taxes.

That is entirely different than what you are saying that AirBNB should do which is to collect and pay the taxes themselves. Who would be responsible if the tax figure that they used for Mexico City was incorrect? What if Munich had one rate for hotels and another for b&bs? Who is going to clean up the mess if Jakarta can't figure out which hotel AirBNB is paying taxes on?

Sorry that it upsets you that AirBNB would have recourse to contest the City's decision in court. Must be a very bitter pill for you to swallow. It's called "America".

>"I don't hate Ed Lee or anyone, but it's the job of journalists to show the public how these self-interested politicians operate"

Steven, give it up already. You are clearly NOT a journalist, this is SO obviously a cheap shot at Ed Lee/Conway. Stop embarrassing yourself. This was reported on in the Economist by real journalists. They wrote about how business models are changing and the tax structure is adapting. But things do not happen overnight, like with Sales Tax. I know that it is a wet dream for you and Tim that the City made a decision and AirBNB hasn't immediately rolled over and accepted it but they are entitled to challenge it, as they should. They (and Ron Conway) are smart enough to know that they don't have a future of just not paying taxes that they are legally responsible for. They do have recourse. Again, sorry.

Jounrnalist. Wow. How about "America's Cup Is Killing People!". Any Pulitzer offers for that one?

Posted by Troll on Mar. 26, 2013 @ 11:13 am

local tax rules of every town on the planet. Steven over-simplifies the situation by assuming that there is only an issue with SF. But if AirBnB has to collect the tax for SF, then why not for every other city and location?

And how can they be possibly be expected to know the tax rules for everywhere?

Clearly the attempt to foist a hotel tax onto AirBnB makes absolutely no sense whatsoever, and they are correct to duck thatc an of worms.

AirBnB can be anywhere (Bahamas, maybe? Good luck collecting taxes there). Taxes have to be colllected on the people in that locality, where the property is located.

Posted by Guest on Mar. 26, 2013 @ 11:21 am

been estimated in the hundreds of millions of dollars. That is a far bigger problem than whether a broker like AirBnB should be pressured into acting as a tax collector because the city is too lazy to enforce their pernicious "hotel tax" themselves.

Why aren't you outraged about all this sales tax evasion?

Posted by Guest on Mar. 25, 2013 @ 11:59 am

Did you pay hotel taxes during your use of Air BnB or not? yes or no?

If yes, hooray. You're a good liberal lefty whatever.

If no, STFU. You're a bad hypocrite.

Simple enough.

Side question: does your lease allow you to sublet, yes or no?

If yes, then you should go on renting your hippie house out to hippies

If no, then you should be evicted so someone else can enjoy your rent controlled hippie house.

Your babbling defensiveness is amusing, but you really need to go get a job at a McDonalds or something. Maybe Jack in the Box? They have that late night stoner combo meal now.

Posted by Guest on Mar. 26, 2013 @ 11:29 am

What is the budget now in SF? Seven Billion, eight perhaps. That comes out to $10,000 person. We have another revenue problem, in that many workers and independent contractors and others who work "under the table" who get paid in cash and don't report all of their income. However, if an individual under reports income, they not only illegally avoid income taxes, they qualify for free shit from the government. Multiply that times millions, and you see that Air BNB is a small problem.

Posted by Richmondman on Mar. 25, 2013 @ 5:27 am

He only cares that someone, somewhere might not be being taxed for what he does privately in his own home.

Posted by Guest on Mar. 25, 2013 @ 5:41 am

Frankly, I'm less concerned about San Franciscans who occasionally rent out a room then I am with a multi-million-dollar corporation increasing its profits by cheating on its taxes. My articles have actually defended San Franciscans who might inadvertently be stuck with a tax bill because of Airbnb's barely concealed hostility to paying its taxes. It shouldn't be up to each host to pay the TOT when that can easily be done by the huge corporation that is facilitating and profiting from each transaction. Airbnb hosts should be as upset by this story as the rest of San Franciscans whose city leaders say they don't have the money to fix Muni, have enough shelter space for our growing homeless population, fund the bicycle network, do police work for most property crimes, adequately fund public and mental health programs, or other important, diminished services -- but they can always find money for more corporate welfare programs.

Posted by steven on Mar. 25, 2013 @ 10:29 am

Um....no. If you understood how these systems work you would know that it would not be at all easy for AirBNB to build in the transient stay tax for every location in the world, and then to allow for disputes and refunds and the like. Then they need a system to file the taxes with every municipality, from San Francisco to Istanbul, on behalf of the host, not themselves.

Think about it Steven...the ONLY reason why you feel that "It shouldn't be up to each host to pay the TOT when that can easily be done by the huge corporation" is because you hate huge corporations. Nothing about fairness or appropriateness is involved, just rabid, uncontrolled hatred.

So when someone books a room through Expedia at a small motel in Redding do you think that Expedia should pay the taxes?

Posted by Troll on Mar. 25, 2013 @ 11:04 am

I just looked at Expedia's terms of service. They ADMIT that they are big time tax cheats. This will dwarf anything related to AirBNB. Here...see for yourself:

"The Expedia Companies do not collect taxes for remittance to applicable taxing authorities...The hotel suppliers are responsible for remitting applicable taxes to the applicable taxing jurisdictions."

This is BIG TIME tax cheating!!! Go get 'em Steven!!!!

I don't think that Conway is an investor in Expedia but try to summon up the motivation anyway.

Posted by Troll on Mar. 25, 2013 @ 11:20 am

interested in them, even though the amount of tax avoidance is far greater.

Posted by Guest on Mar. 26, 2013 @ 11:17 am

not have to pay a hotel tax. That tax clearly falls upon the provider of a htoel service. And while you and I could argue about whether you and I renting our out spare room is in any reasonable sense a "hotel", the fact remains that it is for you and I to declare that income.

What next? AirBnB witholds income tax on those bookings too?

Municipalities that want to collect taxes should bear the cost and risk of that collection, and not shove it out onto third parties for whom that would clearly be an onerous biurden.

Posted by Guest on Mar. 25, 2013 @ 11:57 am

Actually, as I reported, the Tax Collector's ruling makes Airbnb and its hosts jointly liable for that tax debt (it's called "joint and several liability" in legalese). As for the withholding of income taxes, I'm not proposing that -- but also find it interesting that you would be so astonished at applying the same standard to people making money off property ownership that is rountinely and without question applied to people making money off of work. The sense of entitlement of property owners is truly astonishing, apparently a remnant of feudalism that is still going strong among today's capitalists, serfs be damned.

Posted by steven on Mar. 25, 2013 @ 5:50 pm

not just for RE, so I fail to see the connection you are making.

Of course the SF tax collector thinks it is a "joint and several" responsibility. He would say that, wouldn't he? And it has not been tested in court.

Even if valid, that doesn't mean AirBnB has to collect the tax. It merely means that they may be held liable if the host doesn't pay it. So, the city needs to investogate people like you who have done this without paying the tax, chase you down, and then only if they fail to do thatc an they go after AirBnB.

IOW, it's a last resort and not a first resort since, ultimately, the host should be paying it.

Posted by Guest on Mar. 26, 2013 @ 6:17 am

"Airbnb hosts should be as upset by this story as the rest of San Franciscans"

LOL. Yeah, right. Who do you think will end up paying the 14% if Airbnb gets charged - the Easter Bunny? It just means people renting out their places will get 14% less net revenue.

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 25, 2013 @ 12:47 pm

the guest pays 14% more than that, which gets diverted to the city. In his view, therefore, it makes no difference to the host.

His mistake is thinking that demand in inelastic, and that a 14% price hike will not deter bookings. But of course it will. It is reasonable to predict that people would find other intermediairies, such as CraigsList or overseas-domiciled brokers. Thereby avoiding the 14% and hurting AirBnB.

Or there would simply be less stays, as the price differential with hotels would be reduced.

Posted by Guest on Mar. 25, 2013 @ 12:59 pm

Sock puppets puppeting sock with sock puppets.

Posted by marcos on Mar. 25, 2013 @ 1:19 pm
Posted by Guest on Mar. 25, 2013 @ 1:20 pm

LOL. So the city can simply increase the cost of Airbnb by 14%, without any consequence?

I know that there is an infinite supply of rich people who don't care how much they have to pay to stay in San Francisco, so a 14% increase in charges is of no consequence whatsoever.

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 25, 2013 @ 1:25 pm

if a 14% tax on SFBG ad's would also have "zero" effect on their business, he went strangely quiet.

Posted by Guest on Mar. 25, 2013 @ 1:34 pm

It will be hilarious if Steven wins his crusade, Airbnb starts paying the hotel tax, and Airbnb of course immediately starts deducting the tax before paying SF Airbnb hosts.

Steven will just feel the luv from his fellow Airbnb hosts, I'm sure!

Posted by Demented, Yet Terribly, Terribly, Persistent on Mar. 25, 2013 @ 1:09 pm