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I was just discussing over lunch that I really don't understand why AirBnB doesn't just offer cities the ability to add 'tourist-tax' on top of the AirBnB rates

by mtrimpe 13y ago

I was just discussing over lunch that I really don't understand why AirBnB doesn't just offer cities the ability to add 'tourist-tax' on top of the AirBnB rates. In the end it all boils down to cities not wanting to give up the revenue stream they get from tourists, which is also reasonable since it does cost the city money to care for tourists. I'm convinced AirBnB's position would be much stronger if they would just say "Sure we can tax rentals at X%/$ for your city! Sign this document to give us clearance to run AirBnB in your town and we'll flip the switch in our software."

jessriedel 13y ago
Are tourists taxes ever determined by the principle of estimating the cost of the tourists to the city? Everything I've heard about them is that they are almost pure profit both for the city collecting the tax and for the businesses they frequent, and the mechanism for determining taxes is basically "how much can we charge before we significantly decrease how many people want to come to our city and/or the local business owners revolt?"
- saalweachter 13y ago
  Yeah, for all people talk about evil company X and "if you're not a customer you're a product"... If you're not a resident somewhere, you're not a constituent and the local government has almost unlimited license to tax the daylights out of you. Tourists don't vote, so slapping taxes on everything they buy gets the local government revenue without alienating any voters. My favorite is that, where I live, property taxes -- including school taxes -- are higher for second homes. That is, if you have a weekend or vacation home, you pay more for the schools your children will never attend, because you live somewhere else! But part-year residents also can't vote, so from the political standpoint it's a win-win.
vec 13y ago
I got the impression that NYC's objection was less about revenue and more about the city's management of housing. New York has a pretty severe supply/demand discrepancy when it comes to housing, and they've taken pains for a long time to try and keep what housing there is available and at least sort of affordable. Having a service that de facto converts long-term residential housing to hotels seems like the sort of thing the city would object to regardless of the revenue implications. Besides, most of the money that cities get from tourists they get through sales tax or indirectly through property and income taxes on tourist-supported businesses. I would be very surprised if losing the tax revenue on the hotel stay is enough to convert tourism into a net loss for the city.

by mtrimpe 13y ago

jessriedel 13y ago

Are tourists taxes ever determined by the principle of estimating the cost of the tourists to the city? Everything I've heard about them is that they are almost pure profit both for the city collecting the tax and for the businesses they frequent, and the mechanism for determining taxes is basically "how much can we charge before we significantly decrease how many people want to come to our city and/or the local business owners revolt?"

saalweachter 13y ago
Yeah, for all people talk about evil company X and "if you're not a customer you're a product"... If you're not a resident somewhere, you're not a constituent and the local government has almost unlimited license to tax the daylights out of you. Tourists don't vote, so slapping taxes on everything they buy gets the local government revenue without alienating any voters. My favorite is that, where I live, property taxes -- including school taxes -- are higher for second homes. That is, if you have a weekend or vacation home, you pay more for the schools your children will never attend, because you live somewhere else! But part-year residents also can't vote, so from the political standpoint it's a win-win.

vec 13y ago

I got the impression that NYC's objection was less about revenue and more about the city's management of housing. New York has a pretty severe supply/demand discrepancy when it comes to housing, and they've taken pains for a long time to try and keep what housing there is available and at least sort of affordable. Having a service that de facto converts long-term residential housing to hotels seems like the sort of thing the city would object to regardless of the revenue implications. Besides, most of the money that cities get from tourists they get through sales tax or indirectly through property and income taxes on tourist-supported businesses. I would be very surprised if losing the tax revenue on the hotel stay is enough to convert tourism into a net loss for the city.