Airbnb will begin collecting the hotel tax from its hosts in LA

Attendees at a city forum on short-term rentals (credit: Roy Samaan)
Attendees at a city forum on short-term rentals (credit: Roy Samaan)

Short-term home rental platform Airbnb will start collecting lodging tax from its hosts under a three-year deal with the city of Los Angeles, officials announced Monday. 

The deal, negotiated with L.A. budget and tax officers, could generate up to $6 million for the city annually. Airbnb will collect the lodging tax from its rental hosts starting August 1.

Hosts have always been obligated to pay hotel tax under L.A. law, but tax officials had no way to tracking them down or enforcing the law. The agreement with Airbnb will facilitate that process Airbnb already has similar agreements with cities such as San Francisco, Portland, and Newark, New Jersey.

Both the city and Airbnb praised the pact.

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“Our community of hosts wants to pay their fair share and we want to help,” John Choi, Airbnb public policy manager for Southern California, told the L.A. Times in a written statement.

The agreement does not legalize short-term rentals, according to top budget official Miguel Santana.

The City council is now considering a set of regulations that would effectively make them legal within restrictions, such as the number of days that a room or a home could be listed. The proposal also requires hosts to register with the city and subjects them to steep fines if they fail to do so.

Santana told the Times that the latest tax agreement with Airbnb can be tweaked or revoked as soon as the city adopts new policies regulating short-term rentals. [LAT]Cathaleen Chen