San Francisco News

Debate sparks at City Hall over hotel tax

Wednesday, March 28, 2012

Tourism is San Francisco's number one industry, so any time some talks about adding another tax, it stirs up controversy. There's a debate at City Hall over the definition of a hotel.

This is not a new tax. It's a tax that's already on the books. Here's how it works: if you stay in a motel or hotel in the city, you pay a tax. If you stay at my house for a couple of weeks and I charge you, you don't pay a tax. The debate is if that is fair. The city's tax collector doesn't think so.

Since last July, Phil Li has shared his West Portal home with about 60 people from a dozen countries. He charges less than a traditional hotel and says his guests enjoy a real San Francisco experience.

"They want to play where I play and eat where I eat," said Li.

He finds his guests through a company called Airbnb, short for Air Mattress Bed and Breakfast. It started in 2008 in San Francisco and now has connections in 192 countries. San Francisco's tax collector believes its time those guests pay the city's 14 percent hotel occupancy tax. Former supervisor Aaron Peskin agrees.

"It makes perfect sense. It levels the playing field for existing hotels," said Peskin.

But most of the people at the City Hall hearing, who use Airbnb are adamantly opposed.

"We have not the resources of the major, major hotels," said one San Francisco resident.

But others, including union leaders representing hotel workers, believe allowing quasi bed and breakfast spots to skip the tax is an unfair loophole.

"It's high time that this loophole get closed and get closed quickly, so that we're no longer undercutting the jobs, the industry and the rental market that working class people in the hospitality industry rely on," said Ian Lewis, from Unite Here.

The hotel tax contributes more than $200 million a year to the city budget, but a spokesman read a statement from Mayor Ed Lee indicating he does not support expanding the tax to what is considered an emerging industry.

"As the birthplace of this new, more sustainable sharing economy, San Francisco must be at the forefront of nurturing its growth," said Jay Nath, the San Francisco chief innovation officer.

The mayor has convened a task force on what he calls the sharing economy and he is asking the tax collector to hold off on making any decision while that group meets.

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san francisco city hall, taxes, san francisco news, carolyn tyler
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