Airbnb is a website that allows people to put a room in their house or apartment, or their entire house or apartment, up for rent to anyone in the world. The site serves as an open market where anyone can apply to become a host or guest. To become a host is slightly more involved, but criteria are not so strict as to keep the number of hosts small. Millions of people country-wide have their homes and apartments listed right now.
The main problem Airbnb has been facing is that politicians and hotel owners argue that they artificially lower the market for lodging. As well, local and state governments have been unable to effectively tax income that hosts make on having visitors. Lackawanna County has undertaken an initiative to tax the thousands of hosts in their county. It was found by the controller, Reggie Mariani, that only around two percent of host income has been taxed since Airbnb became wildly popular during Super Bowl 50.
The county has found that the most effective way to tax all income from hosts is to periodically sweep the online listings, then go case by case to see which listings have had a visitor. They plan to subject all Airbnb hosts to the same taxes that hotels in the county pay, which is around seven percent.
Donald Frederickson, the county’s general counsel, does not think the county will be able to stay on top of hosts by using this strategy. The problem they are facing is that there is no better way to find who is not paying their taxes if they do not report them.
As of yet, no county or state has been able to effectively tax incomes made on Airbnb rentals. For this reason, the company has a very negative reputation. As well, they do little to encourage the payment of local taxes. They let renters fend for themselves after taking their cut. The model set forth by Airbnb is set up to benefit visitors rather than hosts.
Lackawana county is undertaking an endevour few other places have dared bring up. They join New York as one of the firmest opponets to Airbnb.