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Airbnb’s Newest Plan for Gaining Legitimacy in New York City: Pay $21 Million in Taxes

@SamShankman

Mar 28, 2014 4:20 pm

Skift Take

Once Airbnb figures out taxes, it may have a leg to stand on as it argues for a repeal of the laws that make two thirds of its NYC rentals illegal — taxes or not. Then there are the leases, landlords, and condo boards to deal with.

— Samantha Shankman

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Dan DeLuca  / Flickr

The West Village in New York City is a popular neighborhood among tourists. Dan DeLuca / Flickr


In the midst of a fight with the New York State Attorney General, Airbnb revealed a new plan for gaining legitimacy in its largest, and arguably most important, market.

In a briefing held today, Airbnb’s head of global public policy David Hantman outlined a plan in which Airbnb would collect and distribute the taxes owed to the city and state directly from Airbnb hosts.

“We’ve proposed that Airbnb take on the entire burden,” explains Hantman.

The plan involves a line item in the booking process in which taxes would be automatically deducted from each booking and transferred to the government.

A similar system was just approved in Portland, Oregon, which Airbnb founder Brian Chesky refers to as the first “Shared City.

Airbnb has come a long way in the past year, leading up to the all-important fight in New York City. In January 2013, Hantman told Skift, “What we’d like to do is figure out a way to make New York the model city.”

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But a year of challenges has left Hantman frustrated.

“In New York, nothing is easy,” he says.

“Laws in New York are complicated and so are the tax laws. It’s hard to know who owes what. The taxes were not passed for a short-term rental market, they were made for hotels.”

Airbnb lobbyists plan to get permission to collect taxes from hosts as a precursor to revisiting the short-term rental law. They’ve also given themselves the relatively tight deadline of June, when the New York State Legislative Session ends, to get both issues wrapped up.

“It’s hard for us to see why they would not want to take money from a company for any activity that’s already taking place,” says Hantman.

The company estimates the taxes would contribute $21 million to the government, enough to fund Mayor Bill de Blasio’s proposal to assist to families leaving homeless shelters.

The Mayor’s office has not yet responded to inquiries from Skift, but Hantman is optimistic about the city’s new leadership.

“Unlike Mayor Bloomberg, who was in no way open-minded about this kind of activity, I think Mayor de Blasio understands that these are his kind of people,” Hantman says.

Airbnb is also initiating some internal cleansing of its own. For the first time it will remove hosts based on the kind of experiences they are offering guests.

Hantman reiterates that it is a “tiny, tiny fraction” of hosts that will be removed and that it was a “completely internal decision” unrelated to the New York State Attorney General’s subpoena.

No details were shared on exactly what constitutes grounds for removal, only that some hosts provide good experiences for guests but not they’re communities.

We’re interested to see whether these 10 hosts, who collectively run 313 units, survive the cuts.

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