Children will accept all sorts of arbitrary rules from their parents, former Supreme Court Justice Antonin Scalia once observed: No television in the morning. No texting at the dinner table.
“But try to let one brother or sister watch television when the others do not, and you will feel the fundamental sense of justice unleashed,” he added in a University of Chicago Law Review article.
That perception of unequal treatment is what spurred the American Hotel and Lodging Association to use April 17, the annual federal tax-filing deadline, to highlight a related — and high-priority — concern of its own: what its sees as short-term Web rental site Airbnb’s less onerous tax oversight.
The association, which represents the U.S. lodging industry, urged state and local governments to reject Airbnb’s voluntary collection agreements, which empower the digital business to act on behalf of local taxing authorities, because they don’t come with sufficient oversight or public input. Further, the association says, the pacts often stipulate that the owners whose homes are being rented through Airbnb’s platform, remain anonymous.
“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,” Troy Flanagan, the association’s vice president of government affairs and industry relations, said in a statement. “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.”
While Airbnb says the agreements address previous criticisms that it’s not paying its fair share of sales and other taxes, the deals have been greeted skeptically in some jurisdictions. Hawaii’s governor and Lancaster County have both reportedly rejected proposals from the company, while San Francisco requires owners to register any short-term rental properties with the city’s treasurer and tax collector.
Still, the firm has successful tax partnerships with 400 local governments around the world and 42 U.S. states — including Alabama, Colorado, and South Carolina — as well as the District of Columbia.
“First, the big hotels complained that Airbnb wasn’t paying taxes and now, after we’ve remitted more than half a billion dollars and partnered with more than 400 governments, they’ve changed their tune,” said Airbnb spokeswoman Crystal Davis. “One thing that hasn’t changed: hotels have taken billions in subsidies to pad their profits and continue to demand billions in tax breaks from governments across the country.”
