BB&K In the News Oct 20, 2014

Cities Grappling With Challenges of How to Tax, Regulate Short-Term Rentals

BB&K Attorney William J. "Jim" Priest Discusses Regulation of Online Lodging Booking Sites Like Airbnb and FlipKey with Bloomberg BNA

By Joyce E. Cutler

Cities from San Francisco to New York and Portland, Ore., to Palm Beach, Fla., are trying to figure out how and how much to regulate home sharing and to bring what could be considered part of the underground economy out in the taxable open.

Whether renting rooms or whole houses for the weekend BottleRock concert in Napa Valley, Calif., or the sprawling South by Southwest event in Austin, Texas, tenants and homeowners are offering space for sale to strangers who book lodging on hosting platforms such as Airbnb Inc., HomeAway.com Inc., FlipKey Inc. and VRBO.com--Vacation Rentals by Owner. And cities are figuring out how to impose transient occupancy taxes (TOT).

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Cities and counties “are very independent creatures” that will come up with “a whole bunch of different solutions to this issue” as the questions and answers evolve, William “Jim” Priest, of counsel in the Municipal Law practice group of Best Best & Krieger LLP in the firm's Ontario, Calif., office, said Oct. 17.

“I think over time what will happen is this will get figured out. It may take legislation, it may take litigation, it may take both,” Priest told Bloomberg BNA.

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