In April 2014, hotel alternative Airbnb — then valued at under $10 billion — announced that it would make like a Hilton and begin paying San Francisco's 14 percent hotel tax. (In reality, the "sharing economy" giant's users pay the tax, which is then collected and sent to the city by Airbnb, but: details.)
That bought Airbnb goodwill with some city elected officials, who were hammering out regulations to allow the company to continue doing business in its home city. But city Treasurer Jose Cisneros maintained that Airbnb still owed tens of millions of dollars in back taxes for the past few years' worth of reservations. That money, about $25 million, was finally paid in February of this year (a few months before a $1.5 billion fundraising round pegged Airbnb's value at $25 billion).
That was good news for the city's bank account and good timing for the Board of Supervisors, which was busy figuring out how to spend the city's $9 billion-plus municipal budget. But then a funny thing happened when the Board went looking for that $25 million: it wasn't there.
Airbnb's back taxes have yet to be "booked" — that is, reflected on the city's ledger as real money that can be spent — by City Controller Ben Rosenfeld.
(Boasts about the back taxes were conspicuously absent from the company's infamous and ill-fated advertising campaign last month, which gloated only about the $12 million or so the company now pays annually.)
So where's the money? Nobody can say. Inquiries are stymied by city law, which forbid public disclosure of tax records.
This could mean that the city is waiting until lawsuits brought by Expedia and other internet companies are settled. It could also mean that Airbnb is trying to wiggle out of its back tax bill via an appeal of its back taxes — which, unlike current hotel tax payments borne by Airbnb's users, would presumably have come from the company itself.
In San Francisco, if you feel unjustly taxed and want to pay less, you are free to file an appeal and make your case. But first, you have to pay the taxes you don't think you owe.
Airbnb denies any appeal is pending. Reached via email in Paris, where the company is welcoming 6,000 of its hosts to its annual Open conference, company spokesman Christopher Nulty said that the company's taxes have been paid "in full," and that the company would never seek "any legal claims related to the back taxes we paid."
But until city legislators have the cash in hand and it's being spent on potholes or affordable housing, doubts remain.
"The only thing I know is that Airbnb said it paid its back taxes, but I have no way of confirming that it did," said Supervisor David Campos, a frequent and vocal Airbnb critic. "We trust Airbnb is telling the truth — now we want to verify."
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