To Tax or Not to Tax?

Spring-Texas-property-taxesResidential Real Estate in San Francisco is in high demand. The folks at, a global community marketplace promoting the shared shot-term housing economy, have development a creative solution to opening the housing market and tackling the challenge of high-priced sleep. Yet at who’s expense?

Starting in 2008, AirBnB opened a digital platform to introduce paying guests to home owners with spare rooms to rent. AirBnB spot checks both the 8.5 million guests and the 500,000 home owners or “hosts” now enlisted, prior to an invitation to participate in the exchange.  However is verifying an ID, building a user profile and confirming reviews enough to satisfy city officials?

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San Francisco Board of Supervisor’s President David Chiu and The Hotel Association claim AirBnB is not playing by the same rules and are dodging their fare share of state taxes. According to Patrick Hodge at The Bay Area Biz Journal, “Chiu noted that the occupancy tax issue was so important to hotel interests that it had united hotel management and union officials in calling for Airbnb users to be required to pay.” Offering a 14% discounted rate by leaving tax off the table, is an unarguable competitive advantage.

However, CEO Brian Chesky views the position differently. In his blog Who we are, what we stand for, Chesky writes, “Airbnb is the new, old way to travel. Decades ago, travelers stayed in boarding homes, neighbors shared what they had, and ordinary people powered the economy. These activities are re-emerging through a new movement called the sharing economy, where everyone can participate.” An open dialogue between two different sides of the street sparks the contrast between public and private interest.
The looming AirBnB tax appears inevitable to keep the peace. Although under no hurry to provoke a ruling, the big question remains, will AirBnB eat the profit loss or pass along the increase to hosts or guests?

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