Airbnb is settling its $120 million lawsuit against the city of San Francisco for $0, bringing an end to a contentious tax dispute that has drawn criticism from the city’s labor unions and elected officials.
The lawsuit, filed on Feb. 23, 2024, sought to recover roughly $120 million in allegedly overpaid business taxes that the company claimed were incorrectly calculated by the city for the tax years from 2019 to 2022.
“We are pleased to have reached an agreement that, above all, protects the public’s money,” City Attorney David Chiu said in a statement. “Our office works tirelessly to defend San Francisco’s tax laws and ensure all taxpayers pay their fair share. This settlement achieves both goals while putting this dispute behind us.”
The settlement may help the city’s large deficit. The $120 million that Airbnb claimed to have overpaid in taxes was being held by the city’s litigation reserve, which keeps money that the city may have to pay out for lawsuits.
More information about the financial implications of the settlement will be shared by the city in March during a five-year financial forecast from the controller’s office, the mayor’s office and the Board of Supervisors’ Budget and Legislative Analyst.
The $120 million sum was an unusually large amount for a tax dispute lawsuit — other settlements that the city has made recently include $2.2 million to the Pacific Bell Telephone company and $1.6 million to Coinbase.
In 2025, San Francisco labor unions called for a boycott of Airbnb over the lawsuit. They staged rallies last October outside of the short-term rental company’s headquarters in SoMa to pressure the company to drop the lawsuit. Elected officials, including District 1 Supervisor Connie Chan and District 6 Supervisor Matt Dorsey, whose district includes the Airbnb headquarters, joined the boycott rally.
“This settlement means that our boycott was justified and we are very glad to see Airbnb finally paying their fair share,” said Kim Tavaglione, the executive director of the San Francisco Labor Council. “Airbnb’s greedy tax avoidance has been costing the city, but now this money is freed up to support essential services for San Franciscans.”
Airbnb alleged that the tax error was due to the city misclassifying the company as a travel arrangement and reservation services firm rather than an online platform.
“The City and Airbnb have reached a tentative agreement, subject to city-level approval, to dismiss its tax refund lawsuit,” read a statement from Airbnb. “We are pleased to reach an agreement and we’re committed to ensuring San Francisco remains a great place to live and work.”