Make way for clarity on Airbnb and hotel taxes

Visitors to San Diego are increasingly bypassing hotels in favor of rented apartments and houses on websites such as Airbnb. Hosts who rent rooms or houses, meanwhile, sometimes bypass the expensive hotel taxes the city says they’ll have to pay.

Airbnb, a San Francisco-based company, lets its users post short-term rentals for everything from a shared room or couch to an entire home. Rental periods vary from one night to one month, and the site connects visitors and hosts in cities around the world.

After a series of setbacks, Airbnb recently announced it will begin requiring operators in San Francisco, Portland and New York to transfer local taxes to visitor bills. So far, San Diego — a city that sees tourism as one of its main revenue generators — isn’t part of those plans.

The lack of specific city regulations has created confusion and frustration among the local hospitality industry and even some Airbnb hosts, though many may be unaware that they need to collect taxes in the first place.

The city says yes. City officials say Airbnb users would have to pay city bed taxes, which would likely add an 11% charge to the typical Airbnb bill. But the rules do not target Airbnb or similar websites. They simply refer to general residential rentals and hotels.

The city also expects anyone using Airbnb to rent out their place to pay at least $50 per year in business taxes.

The city can’t say what percentage of local Airbnb hosts actually write those checks. He relies on them to register with the city, or on someone to report that they are breaking the rules.

Lawmakers in many cities have reacted to Airbnb with a crackdown, a move encouraged by hotels competing with the web company.

This month alone, a handful of San Francisco leaders have offered both county law and one ballot impose strict rules on Airbnb hosts.

But San Diego officials have yet to consider how Airbnb might affect the local tourism industry, or take public action to ensure Airbnb hosts face the same charges and regulations as traditional hotels and vacation homes.

Airbnb’s website doesn’t offer much direction in the meantime.

Airbnb Terms of use informs hosts that they will be required to collect “Applicable Taxes”. He says the operators – not the website – are solely responsible for deciding what it is. The company did not respond to repeated requests.

So it’s largely up to Airbnb hosts to research and pay taxes accordingly.

It is not easy.

John P. Anderson, a North Park resident and chartered accountant, advertises his garden cabin on Airbnb, but confessed he spent about four hours scouring city codes without clearly knowing if he was to collect the city bed tax.

He has chosen not to at this time as he is unsure if the rules apply to him. After all, there is no hotel on his property. He, however, increased his insurance policy and paid federal taxes based on the revenue he collected from visitors.

“I’m not going to go out of my way to pay a bunch of money I don’t owe,” Anderson said.

Another Airbnb host, Ann Callahan, owns Bed and breakfasts in Hillcresta historic five-room home near the neighborhood’s bustling center that she promotes on the rental website — and she thinks hosts like Anderson should pay.

Callahan has a long history of collecting hotel taxes, carrying commercial liability insurance and subjecting his business to health inspections. In recent years, she has also used Airbnb to attract last-minute visitors. She appreciated the help he provides, but suspects his decision to charge bed tax is doing her a disservice in attracting business.

When visitors inquire about Callahan’s bed and breakfast, she sends them a message letting them know that she will be adding an 11.05% tax to their bills. Callahan thinks many customers who don’t respond or who choose another option are deterred by the additional charges.

“I’m sure I lost a lot of business because of that,” Callahan said.

Callahan said Airbnb and the city should do a better job clarifying tax and regulatory rules.

National and local hotel lobbying forces are on the same page.

The chief executives of the San Diego County Hotel-Motel Association and the California Lodging and Hotel Association told VOSD they believe cities like San Diego need to crack down on Airbnb hosts.

“If someone wants to be competitive in the hospitality industry, they should be able to meet the same regulations,” said Lynn Mohrfeld, who runs the state-owned group.

But Mohrfeld said the nature of the situation requires local regulation. Statewide laws would not be effective because cities and counties largely decide how much to tax or regulate rental companies and hotels.

He named Santa Cruz a California success story.

In 2010, the beach town approved a mandatory vacation rental inspection program to deal with off-book properties like those advertised on Airbnb. He has since posted links to a fee calculator and Frequently Asked Questions on the city ​​website too.

The following year, Santa Cruz County also began requiring registration and payment of hotel tax for rental properties, an approach that should bring over $1 million annually to the county.

City Treasurer Gail Granewich said the onus should be on the operators – not the city – to follow the rules.

“It is their duty to understand and find out what is needed,” Granewich said. “It’s all tax laws. We try to do a great job on our website. There is always room for improvement.

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