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Local governments claim Airbnb is violating state law

Airbnb says it has paid all applicable state and local taxes, but some communities say they can't be sure.
Airbnb says it has paid all applicable state and local taxes, but some communities say they can't be sure.

When hotels file local tax returns, they tell communities how much money they collected, and online services for short-term rentals are supposed to do the same. Charlottesville’s Commissioner of Revenue, Todd Divers, says Expedia, Trip Advisor, VRBO and others are obeying the law.

"They’re providing the data, they’re providing the gross receipts. The only one that’s not is Airbnb," he says.

Divers says the city must have that information.

"To ensure that what we are being paid matches what we are supposed to be paid. With Airbnb, they’re just saying, ‘Trust us.’"

Staunton’s Commissioner of Revenue, Maggie Ragon, has been pressing Airbnb since 2015, and she says the company has offered a number of explanations for withholding details.

"The most frequently repeated is it would be too burdensome for us to provide you with this information," she says. "We find that difficult to follow, since the information is all compiled and shared with the hosts.”

Airbnb has also claimed sharing data would violate the Fourth Amendment right to privacy of property owners. It notes, however, that more than 50 communities have been able to get the numbers they need by initiating an audit and claims none of them have found any discrepancies between what was owed and what was paid.

What the firm does not say is that providing information about the location of properties advertised byAirbnb would make it easier for cities and counties to enforce zoning laws that prohibit short-term rentals in some areas.

So why don’t localities just sue for the details required by state law?

"I’m sure that the city of Staunton does not have the legal wherewithal to file a lawsuit against a company as large as Airbnb," Ragon explains.

Divers agrees, adding, "There’s not really anybody in the state that wants to tangle with them, and they know that."

Airbnb is, instead, suggesting it send a single check to the state Department of Taxation and let that agency pay communities the local tax they’re owed. Todd Divers thinks that’s a bad idea.

"It’s a local tax!" he says. "It’s not a state tax. The Department of Taxation shouldn’t have anything to do with it."

According to the Daily Progress, Airbnb has listed properties in 200 communities in the Commonwealth and in one six-month period paid more than $23 million in state and local taxes.
Following the broadcast of this report, Airbnb issued this statement: “Airbnb is collecting and remitting all applicable hotel taxes in Virginia in accordance with state and federal laws which protect private user information. There is a simple legal process by which localities must request data and to date we’ve complied with dozens of requests from jurisdictions across the state which have found no discrepancies with our tax reporting.”

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.

Sandy Hausman is Radio IQ's Charlottesville Bureau Chief