Airbnb and other online vacation rental brokers must pay San Francisco's 14 percent hotel tax, according to a rule published Tuesday by the city's tax collector in spite of efforts by Mayor Ed Lee to delay its implementation.
Lee’s office had urged Jose Cisneros, the treasurer and tax collector, to postpone applying the rule to give a “collaborative consumption task force” time to consider possible legislation that would apply a lower tax rate to such brokers.
“The important thing is to have a policy discussion first, so we can see how to support companies built around the model of collaborative consumption,” Lee said in an interview.
The phrase "collaborative consumption" is used to describe economic activity based on sharing and bartering. Such sharing has become more popular with the help of Internet companies like Airbnb, which allows vacationers to stay in other people's homes instead of hotels.
The tax rule is of particular interest to technology investor Ron Conway, an Airbnb backer who led a $600,000 independent expenditure campaign to elect Lee to a full term as mayor in 2011.
On March 12, Cisneros announced that the proposed rule would be implemented following a March 28 hearing allowing the public to comment on the matter. Conway’s SV Angel investment firm urged local technology companies to send employees to the hearing, which was packed with more than 100 people, many of them wearing Airbnb buttons. Among the speakers was Lee’s chief technology officer, Jay Nath, who urged a reprieve.
Cisneros said through a spokesman that he was actually doing Lee a favor by rejecting the mayor's requests.
“What this is going to do is help out that working group, because we are going to have really clear rules,” said Greg Kato, a spokesman for Cisneros.
The rule does not add a new tax, but clarifies operators' obligations under existing law, Kato said.