Airbnb Has $440M Hotel Tax Tab: Report

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Joyce E. Cutler

Oct. 25 — Airbnb Inc. would owe $440 million if state-level taxes were paid on current listings in all 50 states, a new report estimates.

Sixty percent of taxes on the short-term rentals went unpaid, as Airbnb only has tax collection agreements with 26 states and cities. The biggest losers are New York, owed $110 million; Hawaii, owed $51 million; Texas, owed $19 million; and Massachusetts, owed $17 million, according to, an accommodations site that analyzed active Airbnb bookings to project state tax revenue.

Tennessee is owed $14 million in uncollected taxes, followed by California, due $8.7 million, and Louisiana, owed $8.3 million.

“Any changes to current legislation governing short-term room rentals needs to take into account, not only the tax implications of the rental market, but also the wide variety of operational standards that the travel industry has been held to for years,” said the study, released Oct. 24.

“Policies governing customer refunds, discrimination, damages to rooms—these are all a part of the regulatory pie, in addition to hotel-specific tax. There are no easy solutions, but with this much money at stake for state governments, individual Airbnb hosts and the rapidly growing peer-to-peer business segment, finding the right balance will be critical.”

Lawsuits Simmering

The report, “440 Million Reasons to Tax Airbnb Vacation Rentals,” was released three days after Airbnb sued New York over a state law imposing fines on New York City residents who advertise their apartments for unlawful short-term stays ( Airbnb Inc. v. Schneiderman, S.D.N.Y., No. 1:16-cv-08239, complaint filed 10/21/16 ).

A federal judge in San Francisco is considering a preliminary injunction that Airbnb and Expedia-owned HomeAway seek to prevent Airbnb’s hometown from enforcing a law that holds platforms liable for unregistered postings ( Airbnb Inc. v. City and County of San Francisco, N.D. Cal., No. 3:16-cv-03615, oral arguments 10/6/16 ).

“We are confident in our legal challenge, which is based on years of precedent, and believe we will ultimately prevail. No matter what happens in this case, we remain eager to work with the City on rules that work for San Francisco’s middle-class residents who rely on Airbnb as an economic lifeline,” Airbnb said in a statement.

More Regulations Coming

San Francisco is proposing tougher regulations on short-term rentals. The ordinance proposed Oct. 13 caps rentals at 60 nights, regardless of whether the host is present. The ordinance grandfathers hosts who already registered with the city at the existing 90-night cap for unhosted rentals and 365-night cap for hosted rentals.

“Instead of fixing the broken registration system, we are concerned this proposal will add one more barrier to compliance for hosts. We remain ready and willing to work with the city on meaningful solutions that protect housing and enable middle class San Franciscans to share their homes,” Airbnb said.

Toronto is considering regulations that includes taxing home sharing in the city, which has a 1.6 percent apartment vacancy rate.

Taxes Paid, Uncollected

Airbnb to date has collected and remitted more than $110 million in hotel taxes globally from more than 200 jurisdictions, company spokesman Alex Kotran said Oct. 25.

“In the cities, counties, states, provinces and countries where we have tax agreements, we collect and remit hotel taxes on every single applicable transaction that occurs on the platform. We are eager to work with any municipality willing to work with us to collect and remit hotel and tourist taxes on behalf of our hosts and guests,” Kotran said in an e-mail to Bloomberg BNA.

Airbnb is projected to collect $177 million this year in taxes, with the remaining uncollected taxes exceeding $260 million, AllTheRooms said.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at

To contact the editor responsible for this story: Ryan C. Tuck at

For More Information

Text of the report is at

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Daily Tax Report