Airbnb starts collecting taxes in Paris, its biggest market

Airbnb and the French government have shaken hands on a tax collection plan. The home rental service announced Tuesday it will begin collecting tourist taxes in Paris, which is its largest market.

Starting October 1, vacationers who stay in Airbnb rentals in France's capital will see a new line item on their receipt that will show an extra fee of roughly $1, or 0.83 euros, per person per night. Once collected by Airbnb, this money will be transferred directly to the city, the company said.

"More people share their homes in Paris than anywhere else in the world and this new process will ensure Paris receives more revenue from our community," said Nicolas Ferrary, director of Airbnb in France.

Airbnb is a home rental marketplace that operates in 34,000 cities in nearly 200 countries. Paris is by far its biggest market with more than 50,000 home listings. By comparison, New York City is said to have roughly 16,000 listings.

As Airbnb has grown, it has worked with lawmakers around the world to legitimize its service. In some places, like Paris, San Francisco and Portland, the company has been able to work with city officials to enact laws that allow people to rent their homes on Airbnb. But in other places like New York and Los Angeles, Airbnb has battled with government officials.

One common complaint lawmakers have against Airbnb is that the company doesn't always collect taxes on the short-term rentals it promotes. Airbnb says it's working to do this in many of the cities where it operates. It's already begun collecting taxes in San Francisco, Portland, Amsterdam, Philadelphia, Chicago, Malibu, San Jose, San Diego and Washington, DC.

The company gets between 9 percent and 15 percent of the cost of each rental and has impressed investors with its potential: Airbnb has raised $2.3 billion, making it the third highest-valued venture-backed company in the world with a valuation of $25.5 billion.