HomeAway must give S.F. records, court rules
HomeAway must give San Francisco information about its local vacation rentals so the city can ensure that the company paid its hotel tax, an appellate court ruled Thursday.
“We find that the tax collector acted within its authority,” in seeking records for HomeAway bookings dating to Jan. 1, 2012, the First District Court of Appeal for San Francisco wrote in a 20-page decision.
More than 10,000 San Francisco properties were listed on HomeAway websites (the company also owns the VRBO brand) since that date, according to testimony from Steve Davis, HomeAway chief digital and cloud officer.
San Francisco levies a 14 percent tax on temporary rentals, whether they occur in traditional hotels or the new breed of vacation rentals in private homes.
Airbnb has collected this tax from guests since October 2014 and remits it directly to the city. But HomeAway said its hosts are responsible for complying with local laws such as hotel taxes. San Francisco wants to ensure that those hosts have been remitting the tax,
as well as paying for a required annual business license. To verify this, the tax collector said it needs records of all HomeAway bookings.
San Francisco subpoenaed HomeAway two years ago for the information. When the Texas company, which is now owned by travel giant Expedia, refused to comply, San Francisco petitioned the Superior Court. That court granted the city’s request but stayed enforcement pending HomeAway’s appeal.
“There is insufficient evidence to show that the subpoena was burdensome or overbroad,” the Superior Court wrote. It rejected HomeAway’s arguments that the subpoena violated its First Amendment rights, its customers’ constitutional rights, and the Stored Communications Act, “which regulates the government’s ability to compel disclosure of some electronic data stored on the Internet.”
The appellate court agreed with the lower court’s reasoning, noting that since San Francisco was not seeking actual email correspondence of HomeAway hosts and guests, it was not violating customer privacy.
HomeAway did not immediately reply to requests for comment.
“HomeAway has to play by the same tax rules as every other company operating in San Francisco,” said City Attorney Dennis Herrera. “We’re pleased the courts have once again affirmed that you don’t get special treatment just because your business happens to use the Internet. A level playing field benefits all San Franciscans.”
San Francisco Treasurer José Cisneros added: “Our job is to enforce the city’s tax laws. Businesses in San Francisco can’t ignore our laws. The transient occupancy tax is due whenever a visitor pays to stay in our city. We want everyone who hosts (visitors) to understand that the tax applies.”
This case is separate from HomeAway’s other recent lawsuit with the city. HomeAway joined rival Airbnb in a lawsuit challenging a San Francisco law that would impose steep penalties on websites for arranging temporary rentals of unlicensed properties. The companies lost that case, which led to them agreeing to jettison any unregistered hosts by early this year. A Chronicle investigation showed that HomeAway’s number of local listings fell from 1,208 in August to 509 in January.