Affordable Hotels in San Diego|"Our Rooms Should Be Taxed Like Hotels"

Source           :     wired.com
Category      :     Affordable Hotels in San Diego
By                :     MARCUS WOHLSEN
Posted By   :     Hotels in Virginia Beach North Courtyard

Affordable Hotels in San Diego

Airbnb — the company that lets you pay to stay wherever a stranger offers a room — is vowing to make nice with the tax collector, agreeing that its rooms in New York City should be taxed much like hotel rooms. It’s yet another step in the rocky evolution of the so-called sharing economy, where companies such as Airbnb attempt to facilitate a more fluid exchange of goods and services via the internet. Most of the clashes over what’s also being called “collaborative consumption” have taken place in the heavily regulated arenas of rooms and rides. Airbnb chalked up a victory in one of the most recent disputes. Instead of gloating, however, Airbnb CEO Brian Chesky extended a self-interested olive branch. Following New Yorker Nigel Warren’s successful appeal of his $2,400 fine for renting out a room through Airbnb, Chesky said the company wants to work with New York City to create a clear legal framework for people to rent out their rooms and homes. “Our hosts are not hotels, but we believe that it makes sense for our community to pay occupancy tax, with limited exemptions for those who earn under certain thresholds,” he wrote. “We would like to assist New York City in streamlining this process so that it is not onerous.”

Chesky’s phrasing — “our hosts are not hotels” — is interesting because it frames the willingness to collect taxes as a concession. Sharing-economy businesses such as Airbnb tend to portray themselves as platforms for facilitating connections between private individuals. Airbnb isn’t running a hotel chain, the logic goes: it’s helping people extract value from an unused asset — in this case, an apartment that would otherwise sit empty while the tenant is away for the weekend. As such, Airbnb’s willingness to allow the collection of the city’s hotel occupancy tax is a way of making nice, versus an alternative approach such as, say, battling the city in court over the definition of “hotel.” If such a tax plan goes into effect, the money involved would probably be rather large. Airbnb says 15,000 people rent out their spaces through the company — 87 percent of them the homes in which they live, according to Chesky. In New York City, hotel rooms renting for $40 per night or more are taxed at a rate of $2 per day per room plus 5.875 percent of the rate. So, a one-bedroom apartment near Times Square listed for $139 with a minimum three-night stay would involve an occupancy tax of more than $36 total.

While that kind of extra charge might seem to cramp the sharing economy’s style, it’s the kind of compromise that seems inevitable. In California last month, the state’s public utilities commission passed the country’s first uniform regulations for ride-sharing, creating a legal framework for companies such as Uber, Lyft, and Sidecar. In effect, the rules require ride-sharing companies to follow the same safety and insurance standards as traditional taxi companies — standards the ride-sharing companies say they already exceed. Without such legal sanctions, however, the only other place sharing-economy disputes are likely to end up is in court. When it comes to who gets to share what with whom and who gets paid, conflict is inevitable. The only question is whether those conflicts get resolved through legislation or litigation.

Source : wired.com/business/2013/10/airbnb-taxes/