Three days after the Board of Supervisors last month passed legislation enabling Airbnb to accelerate into a profitable future prior to settling up the millions of dollars the city's treasurer says it owes San Francisco, the company made a little announcement. Its April valuation of $10 billion was out of date. The new number is $13 billion.
Well, things change.
On the very day of the board's final vote, Treasurer José Cisneros issued a timely statement. A proposed amendment making the settling of Airbnb's back taxes a precondition for the company's validation was, per the treasurer, superfluous and unnecessary. "This Office is proud of its work in diligently and effectively collecting amounts owed to the City and County of San Francisco," he wrote, "and has a wide array of options to collect outstanding taxes that remain unpaid."
Assured by Cisneros that he did not require additional legislative tools to collect the taxes he in 2012 determined that Airbnb owes, the supes spurned that amendment.
And yet, in those two years, Cisneros hasn't collected any taxes from Airbnb (or, if he has, neither he nor the company is saying anything). When asked why the taxes remain outstanding, Amanda Fried, the treasurer's policy and legislative manager, declined to state. "We can't disclose any individual taxpayer information. So I can't tell you or even anybody in city government whether Airbnb paid their taxes."
An air of mystery regarding whether an ascendant and politically plugged-in corporation has deigned to pay the taxes it owes puts members of city government in an awkward position. But it's a fine place for Airbnb. Had the supes voted differently and required the company pay its tab, the leaders of every other city on God's green earth would line up, hats in hand. That's a cascading cost that companies whose valuations leap $3 billion in half a year tend to avoid.
This would also create a costly and time-consuming headache for a company planning an imminent IPO. Instead, Airbnb announced its gaudy new valuation on the heels of the vote legalizing it in its hometown, and can soon monetize that $13 billion.
So, those are the factors incentivizing Airbnb to hold onto its money — rendering some manner of tax settlement in this or any city unlikely in the near term. The treasurer, however, could sic the City Attorney on Airbnb. This would likely trigger years of costly litigation to collect the money the Board of Supervisors didn't mandate Airbnb to pay up front, and which the treasurer said he didn't require its help to recover.
But, in a situation where little is certain, this much is: That hasn't happened.
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