Airbnb Agrees To Collect, Pay Hotel Taxes in LA
LOS ANGELES (CBSLA.com) — People who rent out their Los Angeles homes on Airbnb will have to pay taxes on the money they make starting next month.
The short-term rental company has agreed to collect and pay hotel taxes under a three-year agreement announced by city officials Monday.
Starting Aug. 1, Airbnb will be responsible for paying the hotel taxes - also known as "transient occupancy taxes" - that are owed by hosts who rent out homes and properties.
The city estimated the taxes could bring in $5.8 million in annual revenue.
Airbnb Southern California public policy manager John Choi said the "agreements allow cities to rightfully benefit in the economic impact of home-sharing while also making it easier for Airbnb hosts, the vast majority of whom are middle-class people sharing their own home, to comply with local tax laws. We are pleased that this process is moving forward and will benefit Angelenos."
The city council is also considering regulation for Airbnb and other online home-sharing services like HomeAway.
The proposal includes limiting the number of days properties can be rented out, and requirements that the hosts register with the city for enforcement purposes.
Councilman Mike Bonin, who called for regulating short-term rentals last year, said too many property owners were evicting tenants and turning their properties into purely commercial hotel and motel businesses.
Bonin said he is "glad to see that Airbnb has agreed to do its part in helping the city collect the transit occupancy tax that it is owed."
"This funding is a vital part of the city's comprehensive efforts to address homelessness," he said. "But it remains urgent for the city to approve reasonable regulations governing the short-term rental industry. We need to let our regulations dictate how much revenue we receive, and not let potential revenue dictate what sort of regulations we craft."
The tax collection agreement could be terminated at any time during the next three years if short-term rental regulations are adopted by the city.
