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Airbnb Agreements with State and Local Tax Agencies

A March 2017 50-page report, written with the support of the American Hotel and Lodging Association, reveals 12 publicly available agreements that Airbnb has made with various state and local governments. The company had already signed around 200 agreements at the time of the report, but the author of the report, Dan Bucks, a former director of the Montana Department of Revenue, wrote that "The large majority of Airbnb agreements are being held secret from the public." He assumed that the 12 public agreements that he evaluated in this report are "reasonably representative" of the nature of the secret agreements, but who knows?

Bucks contended that the following major problems in the agreements called for immediate action:

• Unjustified favoritism for Airbnb and its lodging operators,

• Improperly ceding tax authority to Airbnb,

• Granting huge benefits to third-parties who have not signed the agreements,

• Unfair treatment of other taxpayers, businesses and citizens,

• Violating standards of transparency and democratic governance,

• Undermining compliance with tax and regulatory laws, and

• Spreading undesirable precedents through state laws patterned after the agreements.

"Because of the serious problems created by the agreements, the report recommends that tax agencies stop signing Airbnb agreements and oppose legislation that would incorporate those features in law. Agencies that have signed those agreements should reevalute them and consider terminaton. As a better alternative, agencies should seek legislation updating lodging tax laws to ensure proper compliance and undertake a comprehensive lodging tax compliance program."