California bill would clamp down on AirBnB tax evaders

Proposed bill would also prohibit rentals in cities that have banned them

Legislation introduced in the California state senate this week seeks to ensure that people renting out homes or rooms on sites like AirBnB pay visitor taxes on those rentals.

More than 400 cities and 55 counties in California allow residents to rent out part or all of their homes and levy a transit occupancy tax on those rentals. But payment is sporadic and municipalities often have no way of knowing who in their community should be paying the tax.

Senate Bill 593 would require operators of vacation rental services like AirBnB to report to local authorities the location of the residences, the number of nights they were occupied by visitors and the amount paid for the rentals. Cities could then use that information to ensure they get the taxes they're owed.

San Francisco has raised over $200 million per year from the tax in recent years, and some of that is lost to private room rentals. The money typically pays for government services associated with non-residents, such as transport systems and tourist attractions.

"The Sharing Economy is all about sharing in our states prosperity and that means taking care of our roads, parks and making sure our communities are safe," said the bill's sponsor, Senator Mike McGuire, a Democrat for Healdsburg, in a statement.

The bill would also stop vacation rental platforms from allowing rentals in communities where they are prohibited by local ordinance.

It also allows cities to establish local laws that would levy fines for non-compliance. A first offense could be fined at up to $1,000 per day, a second violation could be fined at up to $2,000 per day and subsequent violations at up to $5,000 per day.

AirBnB already collects transit occupancy tax automatically on rentals in a handful of areas, including two in California: San Francisco and San Jose, which levy a respective 14 percent and 10 percent tax on rentals of less than a month. The site also collects taxes on behalf of Washington, D.C.; Chicago, Illinios; Multnomah County and Portland in Oregon; and Amsterdam in The Netherlands.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags internetlegislationInternet-based applications and servicesAirbnb

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Essentials

Brother MFC-L3745CDW Colour Laser Multifunction

Learn more >

Mobile

Exec

Sony WH-1000XM4 Wireless Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?