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Airbnb lawsuit claims Boulder improperly taxes fees

BOULDER — Airbnb Inc. filed a lawsuit this week against the city of Boulder and its city manager’s office, accusing municipal tax collectors of improperly taxing guest fees charged to users by short-term rental technology platform for its services.

According to Airbnb’s complaint, the platform imposes a “tax on the ‘price paid for the leasing or rental of any dwelling unit for a period of less than thirty days.’ The guest fee is not part of the ‘price paid for the leasing or rental of [a] dwelling unit[.]’”

Boulder staffers conducted a tax audit on Airbnb payments to the city for a period from early 2017 to late 2019, according to court documents, and determined that Airbnb owed $514,780.06, $344,334.49 for back taxes, $34,433.45 in penalties and $136,012.12 in interest.

Airbnb sought relief from a Boulder Municipal Court, but last month the court “issued a written decision in which it determined that the guest fee was subject to tax and that Airbnb was not entitled to abatement of interest or penalties,” the complaint said. 

Airbnb is demanding that a judge vacate its outstanding tax bill and hold that going forward payment of guest fees are not subject to tax.

A Boulder city representative told BizWest that officials are aware of the lawsuit but won’t comment on ongoing litigation. 

Source: BizWest