Coming Soon: Hotel Tax on Airbnb Rentals in San Francisco

Next month, the city will start charging renters a 14 percent occupancy tax on behalf of its hosts.

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By Laura Entis

Opinions expressed by Entrepreneur contributors are their own.

If you're planning to stay at an Airbnb in San Francisco, rates are effectively going up 14 percent as of October 1st. That's because the peer-to-peer rentals startup, which has been at the center of an ongoing legislative battle, has agreed to start collecting occupancy taxes from guests on behalf of its hosts.

"Our community members in San Francisco have told us they want to pay their fair share and the overwhelming majority have asked us to help," David Owen, Airbnb's regional head of public policy, wrote in a blog post Wednesday. "This has been a complicated issue and we're happy to be taking action to help simplify the collection process for hosts, guests and for the City."

Related: Innovation vs. Regulation Fight Continues as Airbnb Reveals Host Names to NY?s AG

City officials have long claimed that Airbnb, through a regulatory loophole, has dodged the hotel tax applied to short-term rentals, costing San Francisco millions of dollars in lost tax revenue.

While the rentals startup initially agreed to start taxing guests by June 1st, it's since dragged its heels. This latest announcement comes after an eight-hour session, attended by Owens, in which the San Francisco's Board of Supervisors' Land Use Committee discussed revisions to a proposed law that will regulate short-term rentals, which are currently illegal.

Earlier this year, Airbnb agreed to apply an 11.5 percent occupancy tax on all listings in Portland, and has discussed adding a similar tax in New York City.

Related: Sharing Economy Sets Sights on Business Travelers -- But Will They Bite?

Laura Entis
Laura Entis is a reporter for Fortune.com's Venture section.

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