Airbnb Class Action Says Company Doesn’t Remit Taxes

Airbnb has been hit with a class action lawsuit filed by numerous Georgia municipalities who claim the company failed to pay taxes that they collected from consumers.

The plaintiffs allege that the rooms sold to consumers are considered “accommodations” which are subject to tax provisions in Georgia statutes, as well as the local ordinances in which they transact business.

The Airbnb class action lawsuit states that counties and cities in Georgia can impose excise taxes on the short-term rental of rooms at rates between three and eight percent. The plaintiffs claim they have enacted ordinances which collect taxes from companies such as Airbnb.

For example, the city of Rome, Ga., one of the plaintiffs in this class action, imposes an eight percent tax for every occupancy of a guest room in a hotel within the city, the plaintiffs claim.

“The amount of Occupancy Tax that Hosts (and Defendants) are required to collect and remit to Plaintiff Class Members is independent of and in addition to any ‘sales and use’ or other taxes required on lodging transactions,” the Airbnb class action lawsuit states.

The plaintiffs claim that under Georgia law, the supplier of accommodations and the consumer of the accommodations are liable for the payment of the Occupancy Taxes.

According to the Airbnb class action, Airbnb currently collect taxes from consumers in 48 states, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands, and remit these taxes to the governments in which they do business.

“Plaintiffs have repeatedly asserted that Defendants and their Guests and Hosts are obligated to collect and remit Occupancy Taxes for accommodation rentals in Plaintiffs jurisdictions and demanded that Defendants collect and remit Occupancy Taxes to Plaintiffs. Yet, Defendants have failed and refused to collect and remit the Occupancy Taxes owed to Plaintiffs and the Plaintiff Class,” the Airbnb class action lawsuit states.

The plaintiffs claim they sent numerous demand letters to Airbnb asking the company to fulfill its obligation in collecting excise taxes and remitting this money to the appropriate government entities. They claim the defendants never responded to any of the demand letters.

The Airbnb class action seeks a declaratory judgment and injunctive relief requiring that Airbnb comply with the Occupancy Tax laws of the state of Georgia, as well as the municipalities.

Airbnb has allegedly violated Georgia’s excise tax on rooms, lodgings and accommodations, according to the plaintiffs.

In addition, the plaintiffs claim that Airbnb is currently violating Georgia laws by not properly identifying, categorizing and quantifying the Occupancy Taxes that should be paid by the occupant during the purchase of the rental.

The plaintiffs state the defendant has violated Georgia’s Uniform Deceptive and Unfair Trade Practices Act, as they have created confusion regarding the payment of taxes in the Georgia short-term rental market.

“Defendants engage in deceptive, unlawful, unfair, and fraudulent business acts and practices by misrepresenting to consumers and owners that Defendants are displaying and collecting Occupancy Taxes, which in fact Defendants do not display or collect,” according to the Airbnb class action lawsuit.

What do you think of Airbnb’s policy of not paying excise taxes to Georgia? Let us know in the comments section below.

The plaintiffs are represented by J. Anderson Davis, A. Franklin Beacham III, Samuel L. Lucas, Lee B. Carter, and Sarah C. Martin of Brinson Askew Berry Seigler Richardson & Davis LLP, by Robert C. Lamar of Lamar Archer & Cofrin LLP, by David G. Archer of Archer & Lovell PC and by Walter J. Gordon of the Gordon Law Firm.

The Airbnb Class Action Lawsuit is City of Rome, Georgia, et al. v. Airbnb Inc. and Airbnb Payments Inc., Case No. 4:20-cv-00022, in the U.S. District Court for the Northern District of Georgia, Rome Division.

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