Wednesday, June 22, 2016
Subpoena seeks data on all hosts operating in San Francisco, and is the latest effort to enforce compliance of Transient Occupancy Tax requirements for short-term rental operators
June 23, 2016-- City Attorney Dennis Herrera filed a petition to enforce compliance with Treasurer José Cisneros’ subpoena to HomeAway.com, an online platform that facilitates short-term rentals. The subpoena demands information about short-term rental hosts and transactions in San Francisco so that the Treasurer can ensure compliance with Business and Tax Regulations, including the filing and paying of Transient Occupancy Taxes (TOT).
“This action is an important step in our efforts to collect transient occupancy taxes from short-term rentals operating in San Francisco,” said San Francisco Treasurer José Cisneros. “Businesses in San Francisco can’t ignore our laws. We’ve done our part to make compliance as easy as possible for hosts, and we have thousands of hosts complying. Today’s action should put on strong notice anyone who has yet to register their business and collect and remit taxes as required.”
This subpoena compels HomeAway to supply information about individuals who have listed properties in San Francisco for rent on HomeAway’s websites, and identifies all rental transactions in order to determine and enforce compliance with Business and Tax Regulations. Also filed with the Superior Court of the State of California is a Notice of Motion and Memorandum of Points and Authorities in Support of San Francisco’s Petition to Compel Enforcement of Subpoena Issued to HomeAway.com Inc. by the San Francisco Tax Collector and a Declaration of Fred Brousseau in Support of Verified Petition to Enforce Compliance with the San Francisco Tax Collector’s Subpoena to HomeAway.com Inc.
“This action is fundamentally about fairness: businesses that follow the law shouldn’t have to compete against law-breakers,” said City Attorney Dennis Herrera. “That principle applies equally to short-term rental hosts who don’t collect taxes, and to the online platforms determined to shield them. I’m proud to stand shoulder-to-shoulder with Treasurer Cisneros and his team to enforce the law, and to protect the interests of taxpayers and law-abiding businesses by ensuring a fair marketplace.”
The Office of Treasurer & Tax Collector has the charter authority and obligation to collect all business taxes in San Francisco, including the TOT. In 2012, the Tax Collector issued Regulation 2012-1 to address how San Francisco’s TOT applies to short-term residential rental transactions. In 2014, the Office of the Treasurer &Tax Collector published guidance to website companies about how to become qualified to act as their host's agent for collection of TOT. In 2015, the Office of the Treasurer created a "Small Operator" designation to simplify tax filing requirements for hosts earning $40,000 or less; designated Airbnb as a Qualified Website Company; and created an online business registration solution for hosts.