July 25, 2017

Rentals rise, taxes increase for home-sharing company Airbnb in Madison

Stock Photo - Waving flag with Airbnb logo. Editorial 3D rendering
Copyright: moovstock / 123RF Stock Photo

The city of Madison is buckling down on Airbnb rentals starting May 1 with a new tax regulation. The shared economy, which brings people together through apps such as Airbnb and Uber, has streamlined travel significantly. But cities across the country like Madison have gotten the short end of the stick.

During the last recession, tech startup Airbnb launched, jeopardizing the hotel monopoly with a low-cost, home-sharing model that managed to find the sweet spot between hotel and hostel. The direct client-to-host model left both parties pleased, but the iconoclastic app drew criticism from local governments.

Across California, the company’s state of origination, city ordinances vary and are constantly changing. In Santa Monica, city officials banned short-term rentals to avoid Airbnb complications, according to Southern California Public Radio, while Los Angeles took a subtler approach; it imposed a tax.

With estimated potential tax revenue of $5.8 million, Los Angeles city officials were surprised just five months later with $13 million in tax revenue from the decision, according to SCPR.

The company is not trying to disguise this fact. Last year, it released a report highlighting the tax revenue available to cities who partner with the app. “As we meet with Mayors,” the company […]

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The News for the Gig Economy Staff is constantly searching the web for the latest news regarding freelancing and gig platforms to bring them to you in one handy place. All articles with this generic author have been sourced with the original location at the bottom of the piece. We encourage our readers to view the original source of all excerpts. NGE is a project of ARC Online, LLC.

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