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    Airbnb Sues Boulder Over Taxation of Guest 'Service Fee'

    Airbnb is suing the city of Boulder, Colorado, arguing the service fee the platform charges to guests and hosts should not have been taxed in recent years. The lawsuit calls for the rescission of a Boulder Municipal Court ruling in July, determining that the money collected from the fee is taxable. The court ordered Airbnb to pay $415,000, including around $150,000 in interest and penalties, for unpaid taxes on fees assessed in 2018 and 2019. Airbnb conceded to collect taxes on transactions made through its site and pass that money along to Boulder per a 2016 agreement. While the rental marketplace is not disputing that taxes are owed on the "nightly rental charge," it does contend that the service fee "helps us run our platform and offer services like 24/7 support on your trip." Airbnb adds that, during the period relevant to the dispute, Boulder's code dictated that the 7.5% short-term rental tax applied to the "price paid for the leasing or rental of any dwelling unit for a period of less than 30 days." The company claims the service fee covers its services, not for leasing a rental unit, with the suit signaling Airbnb did not pay taxes specifically on the service fee charged to guests, not hosts. In February, Boulder revised the code language to state that the rental tax is applied to "the price paid for short-term rental lodging services."

    Denver Post (08/22/23) Thomas Gounley

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