Airbnb: sharing can make a stronger New York
- Sales Tax News
- Oct 21, 2016 | Gail Cole
Update 10.22.2016: Gov. Cuomo signed the bill making it illegal to advertise certain short-term rentals on Friday. Shortly afterward, Airbnb filed suit against the state and New York City in New York's Southern District Federal District Court, contending that the policy will cause it "irreparable harm."
There’s a bill sitting on New York Governor Cuomo’s desk that would make it illegal to advertise short-term lodging in dwelling units located in certain multiple dwelling establishments. In fact, it would penalize anyone advertising such units for any purpose other than as a permanent residence. Penalties for offenders would range from $1,000 for the first violation to $7,500 for three or more violations.
In many parts of New York, it’s already against the law to rent out multiple dwellings on a short-term basis unless the permanent resident is also present — but that hasn’t prevented the practice. Assembly Bill 8704 would give enforcement teeth.
Airbnb is strongly opposed to the measure. In early September, its general Counsel Rob Chestnut sent a letter to Gov. Cuomo enumerating the bill’s “legal infirmities” and concluding: “Assembly Bill 8704-C, if signed, would be tantamount to a rejection of an effort to pursue a common sense policy resolution and leave Airbnb with no choice but to stand up for its New York hosts and immediately commence litigation against New York State. We urge you to choose the path of partnership instead.”
Yet the share economy giant is doing more than making threats: it’s come up with an alternative solution. The September 6 letter states that “the company believes that there are clearly available lawful alternative legislative options to meet legitimate policy objectives while still protecting the right of everyday New Yorkers to share the homes they live in [in] order to help make ends meet.” It has now provided more details on “comprehensive reform that promotes responsible home sharing.”
Airbnb’s solution: Sharing for a Stronger New York
Airbnb’s plan grows from the following five points:
- One house, one home. Only people with a single home within the five New York City boroughs would be able to rent out their home.
- Simple, mandatory registration. A streamlined, online registration system would allow Airbnb and similar platforms to register hosts on the state’s behalf, increasing accountability and improving enforcement.
- Make home sharing work for all. Landlords would be allowed and encouraged to set clear rules for short-term rentals in their buildings. A portion of the revenue collected would be secured for ongoing maintenance.
- Good neighbor rules. Any individual could notify Airbnb of complaints concerning home sharing through its new Neighbors Tool. Hosts should also be required to have insurance.
- Pay tourist taxes to support affordable housing. Hosts would be required to pay all local and state lodging taxes, “with online platforms authorized to collect and remit taxes from guests on their behalf.”
Governor Cuomo is getting pressure from both fronts. While home-share platforms and many of their users are urging him to reject the bill, more than 50 state and New York City officials are urging him to sign it over concerns that “sites like Airbnb are depleting the city of much needed affordable housing units.” The governor has until October 29 to act on the bill.
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