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Time to end Airbnb’s secret tax deals with governments

Time to end Airbnb’s secret tax deals with governments

WASHINGTON, DC – The American Hotel and Lodging Association (AHLA) called on state and local government leaders on National Tax Day, to start taxing Airbnb and other short-term rental sites with the same oversight and transparency as hotels, especially in light of Airbnb’s recent announcement that it will start including hotels as part of its listings and the continued growth of commercial Airbnb operators.

AHLA also called on state and local government leaders to reject Airbnb’s pursuit of voluntary collection agreements (VCAs) unless it includes transparency with taxpayers and the oversight to ensure Airbnb is paying its fair share. VCAs are deals Airbnb has been making with jurisdictions where the company agrees to collect and remit certain predetermined state and/or local taxes on behalf of the property owners, subject to certain stipulations, which are often strict and atypical for tax matters. AHLA says Airbnb is negotiating these deals behind closed doors and the agreements are crafted without public input and don’t include adequate oversight or auditing measures to ensure Airbnb is paying the proper amount of taxes.

“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 to ensure the company pays its proper share of taxes,” stated Troy Flanagan, vice president of government affairs and industry relations at AHLA. “It’s like putting an empty jar at the counter of a retail store and asking customers to voluntarily pay sales taxes. There’s no accountability.”

Existing VCAs negotiated by Airbnb include special treatment not afforded to other taxpayers under ordinary tax law. The table below illustrates the special tax treatment and unprecedented limitations on oversight that Airbnb has negotiated with its voluntary tax agreements with hundreds of state and local jurisdictions across the country.

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