Airbnb’s 'Shared City' Program Will Collect, Remit Taxes

Airbnb CEO Brian Chesky recently announced the beginning of the “Shared City” initiative, which will “cut red tape” and “collect and remit taxes.” Airbnb will test the program in Portland before tailoring and exporting the program to other cities.
March 30, 2014, 11am PDT | James Brasuell | @CasualBrasuell
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A recent post by Airbnb announced a dramatic change in course for the embattled room-sharing company. CEO Brian Chesky describes a new initiative called the Shared City as follows: “We’re offering to cut red tape and to collect and remit taxes to the city of Portland on behalf of our hosts. This is new for us, and if it works well for our community and cities, we may replicate this project in other U.S. cities.”

The Shared City initiative responds to Airbnb’s ongoing legal troubles with governments and affordable housing advocates. According to a recent article about the new initiative by Leigh Gallagher, “[some] municipalities say it should pay taxes. Others say its dwelling-sharing practice is illegal.”

Gallagher describes the initiative as “somewhere between Jane Jacobs meets Richard Florida with a 2014, shareable-economy twist.” Whether that association bears fruit or now, the initiative has been some time coming. “Last October, Chesky publicly said that Airbnb believes its hosts should be paying local taxes.”

More details about the Shared City from Gallagher’s article: “under the new deal, Airbnb will make it possible for hosts to donate a percentage of the money they earn on Airbnb to a local cause -- to determined by its hosts and the city of Portland -- and it will match the donations through a percentage of its fees.”

“Perhaps most notably, the company says it is finalizing a plan with Portland to collect and remit taxes to the city on behalf of its hosts. Under the new proposal (yet to be approved by Portland's City Council), Airbnb would collect an 11.5% tax based on what guests pay to hosts (the 11.5% representing the City of Portland's 6% and Multnomah County's 5.5% transient lodging taxes). The tax would be collected by Airbnb out of guests' payment and sent quarterly to the city of Portland.”

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Published on Wednesday, March 26, 2014 in CNN Money - Fortune
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