- Former Montana Revenue Director: “Wayfair decision disqualifies Airbnb’s privileged tax treatment requiring company to be taxed like every other online U.S. business.”
- Calls on state and local leaders to end Airbnb’s special tax deals.
Click here to download report.
WASHINGTON (April 15, 2019) – The American Hotel & Lodging Association released a new report today, National Tax Day, that demonstrates why the Supreme Court’s South Dakota v. Wayfair, Inc. decision eliminates the need for states and localities to enter into “voluntary collection agreements” with Airbnb. The report, authored by Dan Bucks, former director of the Montana Revenue Department and previous executive director of the Multistate Tax Commission, concludes that the Wayfair decision provides the legal framework and incentive to tax Airbnb like every other U.S. online business now.
“Airbnb no longer qualifies—if it ever did—for privileged treatment by tax agencies as a ‘voluntary collector,’” states Bucks in the report. “This treatment gives Airbnb an unfair advantage in the marketplace by creating a tax and regulatory haven for Airbnb lodging operators. Post-Wayfair, Airbnb’s 'voluntary agreements' are now a relic of a past legal premise that no longer exists.”
Bucks urges government leaders to begin the process of terminating existing "voluntary" tax agreements with Airbnb in coordination with state adoption of “general marketplace provider” legislation. Bucks went on to say that disparities between the tax treatment of Airbnb and other online businesses pose a legal risk to states and localities.
The report released on behalf of AHLA calls on state and local government leaders to reject Airbnb’s future pursuit of voluntary collection agreements (VCAs) and look to the Wayfair decision as a pathway to cancel current VCA agreements and bring Airbnb up to code with current industry tax standards and regulations.
“Airbnb has been making back-room deals and strong-arming state and local jurisdictions into ‘voluntary’ tax deals with no transparency, oversight or auditing capability for years,” said Chip Rogers, president and CEO of AHLA. “Airbnb and other short-term rental platforms need to abide by the same rules as all other law-abiding, tax-paying businesses in the industry.”
AHLA urges state and local government leaders to terminate Airbnb’s voluntary tax deals and instead institute a tax policy that will collect taxes from Airbnb and its operators to ensure an even playing field and transparency for taxpayers. In San Francisco, home of Airbnb’s corporate headquarters, the company agreed to pay back taxes and collect city taxes from its hosts. AHLA urges other states and localities to follow suit.
“Airbnb’s secret tax agreements are hurting communities across America by shortchanging their schools, infrastructure, and other public services” stated Rogers. “Airbnb’s special treatment needs to end.”
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