Airbnb just paid tens of millions in hotel back taxes to San Francisco

Airbnb has paid “tens of millions” in owed hotel taxes and penalties to the city of San Francisco, according to SFGate.

The short-term rental startup had technically been operating in the city illegally until San Francisco passed the so-called “Airbnb law” which took effect on February 1.

That law allows people to rent their homes for less than 30 day periods, as long as they live there nine-months out of the year and register as official hosts.

But the city had also been seeking back taxes from Airbnb for the last few years, saying that it was essentially operating a hotel business.

Airbnb’s decision to pay San Francisco raises the question of whether it might settle with other cities that are seeking hotel taxes from the company. It may owe up to $US200 million, according to SFGate.

An Airbnb spokesperson told Business Insider that it had “concerns about this assessment” but said it paid what was owed in full.

Here’s Airbnb’s full statement:

We have been engaged in a formal process with the Treasurer’s Office regarding back taxes and have been eager to reach a resolution. Two weeks ago, the Treasurer’s Office told us what they thought was owed in back taxes. Though we have concerns about this assessment — the tax rules in San Francisco are unique and the subject of ongoing litigation brought by other companies that we are closely monitoring — we have paid it in full. We remain focused on working with everyone to make sure the new law governing home sharing that took effect in February has a chance to work. Airbnb already collects and remits occupancy taxes in San Francisco, and our community contributes millions more in economic benefits throughout this great city and will continue to do so.

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