Airbnb asks New York to change law it says costs $21 mln in lost taxes

SAN FRANCISCO, April 14 Mon Apr 14, 2014 12:49pm EDT

SAN FRANCISCO, April 14 (Reuters) - Airbnb, the start-up accommodation service that investors value at billions of dollars, called on the state of New York to change a law it says is preventing it from collecting $21 million in taxes each year from its hosts.

The tax law, which says only hotels can collect and remit occupancy taxes, excludes Airbnb because the state does not consider it a hotel service. The San Francisco-based company wants New York to allow Airbnb to classify itself as a hotel so it can collect the taxes.

"New York will lose millions of dollars because current tax law prevents Airbnb from collecting and remitting occupancy related taxes," wrote the company's head of public policy, David Hantman, in a blog post. "Our community want to pay its fair share, and we want to help."

Airbnb has come under fire in New York and in other communities for falling afoul of regulations, including tax laws. Last year, New York State Attorney General Eric Schneiderman subpoenaed Airbnb's records as part of a probe.

In March, the company sent a letter to New York City Mayor Bill de Blasio as part of an effort to change the laws.

Gaining legitimacy is an important part of Airbnb's strategy, particularly with investors. In late 2012, it was valued at around $2.5 billion.

In its blog post, Airbnb said its community of hosts and guests would generate $768 million in economic activity in New York and support 6,000 jobs. The numbers came from HR&A Advisors, a consultancy Airbnb hired, a spokesman said.

Late last month, Airbnb said it would help hosts in San Francisco collect taxes by this summer.

(Reporting by Sarah McBride; Editing by Richard Chang)