Airbnb is wildly popular with almost everyone.
Among the few detractors are some neighbors of the short-term rental properties and the Empire State's top lawyer.
Eric T. Schneiderman, Attorney General of New York, made his concerns known in a report, Airbnb in the City, released Thursday, Oct. 16.
It details the AG's office investigation into Airbnb and similar web-based rental operators who, according to the report, "run large-scale enterprises in violation of fire safety, zoning, tax, and other applicable laws."
Most of the data, and hence the report's name, came from four years of data Airbnb provided to the AG after a court fight.
Missing millions in taxes: In the tax area alone, the report asserts that the Big Apple is likely owed millions in unpaid hotel taxes from Airbnb private short-term rentals.
A number of taxes may apply to private short-term rentals, notes the report. In particular, New York City assesses a hotel room occupancy tax of 5.875 percent that also applies to private short-term rentals.
"Few Airbnb hosts appear to have filed the paperwork with New York City necessary to remit hotel room occupancy taxes, nor did Airbnb collect any of the hotel taxes owed," states the report. "Even the most conservative estimate therefore finds that private short-term rentals booked through Airbnb incurred millions of dollars in unpaid hotel room occupancy taxes."
How many millions? The AG staff estimated unpaid tax liability of almost $33.5 million from Airbnb rentals from 2010 through the first five months of 2014.
And that total doesn't even count possible added fines and penalties.
Individual initiative or hidden corporate income? In addition to the tax issues, the report also expressed concerns with myriad zoning violations.
Supporters of the home sharing system are likely to dismiss the report's findings. They tout Airbnb and similar firms in the new sharing economy as pioneers who are busting greedy monopolies that no longer care about their customers.
However, the AG's office found that commercial operators, not residents looking to make some much needed extra cash, supply more than a third of the units and generate more than a third of the revenue in New York City.
That finding is likely to be highlighted by critics of the system, who say "sharing economy" is simply a euphemism for avoiding regulation and taxes.
Do you use Airbnb and similar companies to find lodging when you travel? Would having to pay more to cover taxes affect your decision?
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