7 ms·

People have been making short-term rentals on CraigsList for over a decade, yet nobody expects them to collect hotel taxes. To expect Airbnb research hotel law

People have been making short-term rentals on CraigsList for over a decade, yet nobody expects them to collect hotel taxes. To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. In fact, it's such a burden, that I'm sure Airbnb will support it in a few years time as a way to raise the barriers to entry on their industry.

freerobby 13y ago
Why? Is it any different than Amazon having to research sales tax laws in every municipality it operates in?
- learc83 13y ago
  They don't, only in states where they have a legal nexus until/unless the marketplace fairness act passes the house.
  - deleted 13y ago
    [deleted]
  - deleted 13y ago
    [deleted]
badclient 13y ago
Craigslist does not collect payment to facilitate the stay. They do not offer insurance and serve as mediator during disputes. They do not operate concierge services. They operate significantly less like a hotel than airbnb.
- nostromo 13y ago
  Which is more "hotely" to you: 1) A place where you pay someone to stay overnight. 2) A website that helps people find and pay for #1.
  - judk 13y ago
    Airbnb is #1. They take payment.
    - wpietri 13y ago
      As somebody who has used both sides of Airbnb, I think of them more as a transaction facilitator than as the vendor. Sort of like EBay, in that if I by something off EBay, I'm buying it from the seller, even if money does technically flow through their Paypal arm. Personally, as a customer, I would like to see them take care of collecting any necessary taxes, so that I can use the service in good conscience. If putting my place up on Airbnb requires me to collect extra cash and figure out how to get it to the city, there is no way I'm doing that.
      - malandrew 13y ago
        Exactly. Same goes for Stripe, Braintree and Paypal. For dozens to hundreds of industries, they are the ones that take the payment. Doing so doesn't imply that they operate in every industry for which they process payments.
        code_duck 13y ago
        Offering a payment processing service for merchants is quite different than operating a marketplace. AirBnB is offering a marketplace, like eBay, Etsy, or a trade show, not a generic payment service.
      - deleted 13y ago
        [deleted]
      - deleted 13y ago
        [deleted]
    - kalleboo 13y ago
      So does expedia.com
- belorn 13y ago
  Actually, Craigslist do collect payment for facilitate the stay if its an apartment in New York. $10 per listing (http://www.craigslist.org/about/help/posting_fees http://www.craigslist.org/about/help/posting_fees).
  - dangrossman 13y ago
    A property owner buying an advertisement is not the same as a renter making a rental payment. These transactions are not at all alike.
    - SilasX 13y ago
      They're somewhat alike in that the economic incidence of a tax on rentals will fall (in different proportions) on both of them, and in ways that the tax authorities can't control.
yapcguy 13y ago
> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. A burden? More like a flagrant abuse of the law. It's hard to believe that Airbnb didn't bother researching the law in San Francisco, the very same city the company was founded in.
- wpietri 13y ago
  I'm sure they researched it. And I'm sure it was a minefield. Existing laws will be written with hotels in mind. If J. Random Startup went to the city and said, "Hey, we want to try this new thing," at best they'd get ignored. At worst they'd be told they'd have to register each place as a hotel, set up inspections, get necessary permits, and generally slit their own throats. So strategically, the thing to do is to just ignore the laws, find sufficient technicalities and fig leafs to rebuff government on their first approach, and start the service. If it goes nowhere, then no harm is done. And if, as with Airbnb, it takes off, they're in a much better negotiating position. Now everybody knows what the service is, and it's easy to see that different laws and regulations will be needed. And regulators can't kill the market off without making a lot of people mad. And the city will end up happy: more capacity to absorb large tourist flows, better experiences for the kinds of visitors that would rather stay in a home than a hotel, more money in the pockets of local citizens. And, of course, soon there will be more tax revenue, too.
  - Avitas 13y ago
    It goes even deeper than local ordinances and taxation. Counties often have specific requirements and certifications. Many states and local governments have mandatory 'use tax' and other usury laws that require registration and reporting--regardless of incorporation status or total dollar amounts. Counties, townships, cities, subdivisions and condominiums often have provisions, restrictions and covenants that specifically address and/or expressly prohibit various aspects of subletting such as short-term rentals. Further, many mortgages prohibit renting. Lastly, there's the issue of homeowners insurance. I know that there is language in the AirBnB terms that mandate the owner take care of compliance. I wonder what proportion of homeowners that rent through AirBnB (or similar sites like VBRO) are doing so in full compliance with all of the above.
jdminhbg 13y ago
> In fact, it's such a burden, that I'm sure Airbnb will support it in a few years time as a way to raise the barriers to entry on their industry. A few years? This seems like confirmation that it's happening now.
- aaron695 13y ago
  Why won't someone just set up an alternate site off shore that doesn't charge tax. I thought it'd lower the barrier of entry.
vacri 13y ago
A company researching the markets in which they operate in order to do so legally? Why does AirBnB get a free pass on this one?
deleted 13y ago
[deleted]
mikeash 13y ago
> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. I really hope that's a joke. Why should they be exempt from the law, exactly?
- briandear 13y ago
  What law? Here's the definition of a hotel from the NYC Zoning resolution: [A hotel is:] A building or part of a building in which, living or sleeping accommodations are used primarily for transient occupancy, and my be rented on a daily basis; one of more common entrances serve all such living or sleeping units; and; twenty-four hour desk service is provided, in addition to one or more of the following services: housekeeping, telephone or bellhop service, or the furnishing or laundering of linens.
  - mikeash 13y ago
    All local laws. If the local hotel laws don't apply to AirBnB in a particular locality, then great! But that doesn't excuse them from finding out, or from conforming to laws in other places that do regulate them.
jasonlotito 13y ago
> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. You mean like hotel companies that research hotel laws and taxes in every country they operate in?
kumarm 13y ago
[To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.] Just because you are Internet Business you are entitled to not figure out tax laws? Airbnb is Billion Dollar company (Valuation wise) and saying they don't need understand laws of country they operate in insane.
- briandear 13y ago
  We're assuming they don't understand those laws already. We're also assuming that their terms of service don't put that burden on the homeowner. It would actually be the homeowner's responsibility to know the laws within their locale. Airbnb is simply an agency.
madeofpalk 13y ago
> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. Well, considering it's their buisness, isn't it a necessary burden? That's just like saying a hardware manufacturer shouldnt have to research local wireless compliance laws in each country they enter because it's 'too hard'.
sliverstorm 13y ago
Craigslist is very similar to a newspaper listing section. Nobody expects newspapers to collect hotel taxes when someone lists... well, anything. It's just a listing board. You cannot say this about AirBnB.

freerobby 13y ago

Why? Is it any different than Amazon having to research sales tax laws in every municipality it operates in?

learc83 13y ago
They don't, only in states where they have a legal nexus until/unless the marketplace fairness act passes the house.
- deleted 13y ago
  [deleted]
- deleted 13y ago
  [deleted]

badclient 13y ago

Craigslist does not collect payment to facilitate the stay. They do not offer insurance and serve as mediator during disputes. They do not operate concierge services. They operate significantly less like a hotel than airbnb.

nostromo 13y ago
Which is more "hotely" to you: 1) A place where you pay someone to stay overnight. 2) A website that helps people find and pay for #1.
- judk 13y ago
  Airbnb is #1. They take payment.
  - wpietri 13y ago
    As somebody who has used both sides of Airbnb, I think of them more as a transaction facilitator than as the vendor. Sort of like EBay, in that if I by something off EBay, I'm buying it from the seller, even if money does technically flow through their Paypal arm. Personally, as a customer, I would like to see them take care of collecting any necessary taxes, so that I can use the service in good conscience. If putting my place up on Airbnb requires me to collect extra cash and figure out how to get it to the city, there is no way I'm doing that.
    - malandrew 13y ago
      Exactly. Same goes for Stripe, Braintree and Paypal. For dozens to hundreds of industries, they are the ones that take the payment. Doing so doesn't imply that they operate in every industry for which they process payments.
      - code_duck 13y ago
        Offering a payment processing service for merchants is quite different than operating a marketplace. AirBnB is offering a marketplace, like eBay, Etsy, or a trade show, not a generic payment service.
    - deleted 13y ago
      [deleted]
    - deleted 13y ago
      [deleted]
  - kalleboo 13y ago
    So does expedia.com
belorn 13y ago
Actually, Craigslist do collect payment for facilitate the stay if its an apartment in New York. $10 per listing (http://www.craigslist.org/about/help/posting_fees http://www.craigslist.org/about/help/posting_fees).
- dangrossman 13y ago
  A property owner buying an advertisement is not the same as a renter making a rental payment. These transactions are not at all alike.
  - SilasX 13y ago
    They're somewhat alike in that the economic incidence of a tax on rentals will fall (in different proportions) on both of them, and in ways that the tax authorities can't control.

yapcguy 13y ago

> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. A burden? More like a flagrant abuse of the law. It's hard to believe that Airbnb didn't bother researching the law in San Francisco, the very same city the company was founded in.

wpietri 13y ago
I'm sure they researched it. And I'm sure it was a minefield. Existing laws will be written with hotels in mind. If J. Random Startup went to the city and said, "Hey, we want to try this new thing," at best they'd get ignored. At worst they'd be told they'd have to register each place as a hotel, set up inspections, get necessary permits, and generally slit their own throats. So strategically, the thing to do is to just ignore the laws, find sufficient technicalities and fig leafs to rebuff government on their first approach, and start the service. If it goes nowhere, then no harm is done. And if, as with Airbnb, it takes off, they're in a much better negotiating position. Now everybody knows what the service is, and it's easy to see that different laws and regulations will be needed. And regulators can't kill the market off without making a lot of people mad. And the city will end up happy: more capacity to absorb large tourist flows, better experiences for the kinds of visitors that would rather stay in a home than a hotel, more money in the pockets of local citizens. And, of course, soon there will be more tax revenue, too.
- Avitas 13y ago
  It goes even deeper than local ordinances and taxation. Counties often have specific requirements and certifications. Many states and local governments have mandatory 'use tax' and other usury laws that require registration and reporting--regardless of incorporation status or total dollar amounts. Counties, townships, cities, subdivisions and condominiums often have provisions, restrictions and covenants that specifically address and/or expressly prohibit various aspects of subletting such as short-term rentals. Further, many mortgages prohibit renting. Lastly, there's the issue of homeowners insurance. I know that there is language in the AirBnB terms that mandate the owner take care of compliance. I wonder what proportion of homeowners that rent through AirBnB (or similar sites like VBRO) are doing so in full compliance with all of the above.

jdminhbg 13y ago

> In fact, it's such a burden, that I'm sure Airbnb will support it in a few years time as a way to raise the barriers to entry on their industry. A few years? This seems like confirmation that it's happening now.

aaron695 13y ago
Why won't someone just set up an alternate site off shore that doesn't charge tax. I thought it'd lower the barrier of entry.

vacri 13y ago

A company researching the markets in which they operate in order to do so legally? Why does AirBnB get a free pass on this one?

deleted 13y ago

[deleted]

mikeash 13y ago

> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. I really hope that's a joke. Why should they be exempt from the law, exactly?

briandear 13y ago
What law? Here's the definition of a hotel from the NYC Zoning resolution: [A hotel is:] A building or part of a building in which, living or sleeping accommodations are used primarily for transient occupancy, and my be rented on a daily basis; one of more common entrances serve all such living or sleeping units; and; twenty-four hour desk service is provided, in addition to one or more of the following services: housekeeping, telephone or bellhop service, or the furnishing or laundering of linens.
- mikeash 13y ago
  All local laws. If the local hotel laws don't apply to AirBnB in a particular locality, then great! But that doesn't excuse them from finding out, or from conforming to laws in other places that do regulate them.

jasonlotito 13y ago

> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. You mean like hotel companies that research hotel laws and taxes in every country they operate in?

kumarm 13y ago

[To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden.] Just because you are Internet Business you are entitled to not figure out tax laws? Airbnb is Billion Dollar company (Valuation wise) and saying they don't need understand laws of country they operate in insane.

briandear 13y ago
We're assuming they don't understand those laws already. We're also assuming that their terms of service don't put that burden on the homeowner. It would actually be the homeowner's responsibility to know the laws within their locale. Airbnb is simply an agency.

madeofpalk 13y ago

> To expect Airbnb research hotel laws and taxes in every country they operate in seems like an undue burden. Well, considering it's their buisness, isn't it a necessary burden? That's just like saying a hardware manufacturer shouldnt have to research local wireless compliance laws in each country they enter because it's 'too hard'.

sliverstorm 13y ago

Craigslist is very similar to a newspaper listing section. Nobody expects newspapers to collect hotel taxes when someone lists... well, anything. It's just a listing board. You cannot say this about AirBnB.