Members of the public hold signs Inside the board of Supervisors at a discussion of short term rentals in 2015.

Renting out a spare room or apartment for a few days? Sounds like easy money. But when one Airbnb host in the Mission District complied with San Francisco’s new requirement to register with the city, she received an unpleasant surprise – a bill for hotel taxes. “Now that we complied, we are wondering if we should not have,” she said ruefully.

In a sense the bills being sent to hosts are a salvo in the larger ongoing battle in San Francisco – and across the world – over how to regulate the billion-dollar sharing economy. Cities assert that hosting platforms like Airbnb are like any brick-and-mortar business. The platforms say they are different.

The dispute is playing out in those tax bills in San Francisco.

Airbnb collects the hotel tax directly on its platform from hosts such as the woman in the Mission, and writes the city a monthly check. The city, however, says that’s not enough.

“When you file your taxes, you can’t just send a check, you are required to give information about your income. Every business in San Francisco has to do the same thing,” said Amanda Kahn Fried, a policy and legislative manger with the Office of the Treasurer and Tax Collector.

The city, she said, has no way to check that anyone’s specific taxes have been paid. As a result, “there is joint liability” until the city can connect the dots between a tax payment and an address.

It’s unclear to what extent the city will pursue hosts, but the tactic puts hosts and platforms at odds and may give the city more leverage to regulate Airbnb. Already, the tax bills to hosts – followed by incensed Airbnb blog posts – have sent the City’s Tax Collector and Airbnb back to the negotiating table to address  what an Airbnb spokesman called “the challenging issue” of the hotel tax.

It’s a challenge peculiar to Airbnb. When most businesses pay the hotel tax, they submit information on an address, unit and the number of nights a room has been rented.

Airbnb submits “anonymized” information. As an Airbnb spokesperson explained, that’s “basically a long list of the transactions that happen in San Francisco.”

Does this include addresses, units and number of nights?

“No,” the spokesperson said. The reason, he explained, is that Airbnb is different. Although it pays the hotel tax, it is not a hotel because its hosts cannot rent out their places at will, but are constrained by the city.

But so too are others that pay city taxes, such as SROs and the owners of buildings built before 1979. And they, too, must submit detailed tax information. How far the “we are different” argument may take Airbnb remains to be seen, but it may eventually end up in court. A labor commission failed to buy the “we are different” argument in the case of Uber, and ruled earlier this month that its drivers are employees and not independent contractors. (Uber said Wednesday it is is appealing the decision.)

It’s an argument that Airbnb is also using to battle the Board of Supervisors’ efforts – delayed until July 14 – to effectively regulate short-term rentals.

At present, the city caps un-hosted rentals at 90 days a year. It also requires hosts to register with the city – something fewer than 600 of the more than 6000 hosts have done.

The reason effective caps are so important is that, it’s widely agreed, landlords need to be discouraged from taking long term rentals off the market. One unit taken off the market quickly negates all of the positive economic benefits of homesharing, such as local spending, local earning and the fat tax check the city gets, according to city reports.

To insure compliance, Supervisor David Campos wants hosting platforms to require a city registry number before listing their room, unit or house. Once the host reaches the cap, Campos proposes, the listing should be dropped until the next year. Airbnb is balking.

I suggested to Airbnb’s spokesman that Campos’s suggestion was akin to other public/private arrangements. Banks, for example, require that a business register with the state before it can open a bank account.

Airbnb operates around the world, the spokesperson said. “It would be nearly impossible for us to self-police and take on the role of the government and enforcement agency.”

When it was pointed out that many banks also operate globally, the spokesman offered a different analogy. If he is driving on Highway 101 and is speeding, he said, we don’t ask ATT to provide the highway patrol with that information. Moreover, we let the car companies make cars that exceed the speed limits, he added.

In other words, “we are different.”

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Founder/Executive Editor. I’ve been a Mission resident since 1998 and a professor emeritus at Berkeley’s J-school since 2019 when I retired. I got my start in newspapers at the Albuquerque Tribune in the city where I was born and raised. Like many local news outlets, The Tribune no longer exists. I left daily newspapers after working at The New York Times for the business, foreign and city desks. Lucky for all of us, it is still there.

As an old friend once pointed out, local has long been in my bones. My Master’s Project at Columbia, later published in New York Magazine, was on New York City’s experiment in community boards.

Right now I'm trying to figure out how you make that long-held interest in local news sustainable. The answer continues to elude me.

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  1. Wow, some serious reading comprehension fails here! Airbnb is paying the taxes, just not including all the details the Treasury dept wants and that’s why they’re going after hosts.

    1. Kind of like income tax, the county needs to know the source of income. Oh wait, it is exactly like income tax! Because it’s income!

  2. Hosts are “surprised” that they’re getting tax bills now that they are registered with the city? Seriously? What did they think the point of the ordinance was?

  3. We all pay our taxes, why can’t they? The more they tax dodge the more the rest of us have to bear the burden.
    Airbnb are arguing a ridiculous argument. They have entered a market where they rent rooms. Just because they have created an online exchange it doesn’t mean they should not have to comply with local, state and federal taxes and regulations. Landlords also shouldn’t be able to use the excuse “it’s too hard”. That’s total crap.
    Let’s say I decided to sell beer out of a cooler on the street. Does that mean I should not have to register a business? Comply with laws? Have insurance? Have a beer and wine license?
    Let’s put this another way. Let’s say I setup a website that allowed people to sell home brewed beer. Should I as a website be able to say “it’s nothing to do with me so I don’t have to ensure laws are followed”? Setting yourself up as a middleman doesn’t absolve you of having to ensure you follow the law.

    1. AirBnB is paying the tax. The people dodging are those using craigslist or other sites to list rooms instead of using AirBnB.

      If we make anyone renting a room for less than 28 days register as a business, why not make everyone renting a room for any length of time register as a business? They’re operating as a landlord, right? That’s a kind of business too. Shouldn’t that be regulated and require a license, insurance, etc?

      1. Yes, all hotels should be regulated, including this new type of BnB. Rental housing is regulated. Income from the rental is taxed as income. Landlords pay property tax and tax on rental income. Individuals who sublet a room do so as part of their tenancy, which is outlined in their lease. Property insurance is part of the lease with the landlord. The city has regulations regarding subletting a room.

        Hotel taxes are a significant source of income to the County. They pay for parks, streets, trash collection, and other services you use. Evading taxes affects all San Franciscans.