Airbnb to start collecting taxes for Los Angeles rentals

Instead of city officials trying -- and failing -- to track down hosts, Airbnb will collect the taxes directly and hand over the revenue instead.

Joan E. Solsman Former Senior Reporter

Joan E. Solsman was CNET's senior media reporter, covering the intersection of entertainment and technology. She's reported from locations spanning from Disneyland to Serbian refugee camps, and she previously wrote for Dow Jones Newswires and The Wall Street Journal. She bikes to get almost everywhere and has been doored only once.

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Joan E. Solsman

July 19, 2016 7:36 a.m. PT

Rental startup Airbnb agreed to start collecting taxes from Los Angeles hosts worth millions of dollars every year, according to the Los Angeles Times.

It's the latest move by Airbnb to navigate choppy waters with the local governments where its users rent out their homes for short-term stays. Some cities have criticized Airbnb for skirting hospitality taxes that traditional hotels must pay and for facilitating illegal hotels that take residential properties off the market. Airbnb has noted that its rentals provide travelers with more choice, bring in tourist dollars to local economies, and provide residents with a source of new income.

In Los Angeles, residents who rent out part or all of their homes were already supposed to pay the same kind of taxes as hotels do. City officials, however, were hobbled as they tried to collect because of difficulty tracking down hosts. Under the new deal, Airbnb will handle the process of collecting taxes directly from its hosts and will hand over the revenue to the city.

"Our community of hosts want to pay their fair share and we want to help," said John Choi, Airbnb's public policy manager for Southern California, in an emailed statement. "We are pleased that this process is moving forward and will benefit Angelenos."

The deal goes into effect next month. It should generate more than $5 million in tax revenue for the current budget year, earmarked for homelessness programs.

Update, 10:05 a.m. PT: Adds comment from Airbnb.