Los Angeles city officials announced yesterday that Airbnb will collect taxes from its guests in Los Angeles from August 1, making the city the latest of more than 190 around the world where the company collects taxes directly from its users. The platform will collect and pay 14% tax on the roughly 12,270 active listings in the city, anticipated to earn about $5m annually. It is worth noting that the deal does not yet make the listings legal, and is only a three-year interim solution, after which it can be adjusted or eliminated depending on the City’s findings. In addition to collecting taxes, Airbnb’s new agreement with the City also includes an additional service for hosts who want to rent out their homes as short-term rentals.
Los Angeles city officials announced yesterday that Airbnb will collect taxes from its guests in Los Angeles from August 1, making the city the latest of more than 190 around the world where the company collects taxes directly from its users. The platform will collect and pay 14% tax on the roughly 12,270 active listings in the city, anticipated to earn about $5m annually. It is worth noting that the deal does not yet make the listings legal, and is only a three-year interim solution, after which it can be adjusted or eliminated depending on the City’s findings. According to City Administrative Officer, the payments will at least ensure the city does not lose revenue while debates continue on the best way to regulate the service.