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Airbnb Sued for Failing to Pay Local Occupancy Taxes to Georgia Cities and Counties

A new federal lawsuit claims Airbnb is failing to collect room occupancy taxes from its hosts and customers, and failing to forward that money owed to Georgia’s cities and counties.
Filed on behalf of Hart County and the cities of Rome, Cartersville and Tybee Island, the prospective class action lawsuit contends Airbnb violated Georgia law by refusing to collect the required taxes.

The lawsuit was filed by two Georgia law firms, Brinson, Askew, Berry, Seigler Richardson & Davis and Atlanta’s Lamar, Archer & Cofrin, which have sued other online travel companies over their failure to pay local excise taxes.

The suit, filed Jan. 31 in the Northern District of Georgia in Atlanta, has been assigned to U.S. District Chief Judge Thomas Thrash. The class would be composed of all Georgia’s cities, counties and governments.

A 2015 letter to Airbnb from counsel for the cities and Hart County included as an exhibit in the lawsuit also alleged that Airbnb collected local excise taxes from their hosts and customers, but failed to forward the money the local jurisdictions.

The suit also contends that Airbnb violated its own terms of service, which puts hosts and customers alike on notice that the short-term vacation rental company will bill them for the required taxes in jurisdictions where they stay, and then forward the funds to the appropriate local governments.

The suit seeks a declaratory judgment that Airbnb’s business practices leading to an alleged failure to collect Georgia taxes are both deceptive and illegal, the suit said. It asks for an injunction to force Airbnb to collect and then remit an unspecified amount owed to governmental entities across the state. The suit didn’t put a price tag on the alleged uncollected or unpaid taxes.

An Airbnb spokesman couldn’t be reached for comment.

Other jurisdictions across the country are also pursuing Airbnb for failing to pay local occupancy taxes that brick-and-mortar hotels and their guests routinely pay. Hawaii and Florida have each gone to court claiming Airbnb and other short-term online rentals have failed to pay local excise taxes.

Both law firms behind the Georgia tax suit are veterans of a long legal battle that ended more than two years after the Georgia Supreme Court in 2011 ordered online travel companies Hotels.com, Hotwire, Orbitz, Priceline and Travelocity to collect and remit the taxes.

Anderson Davis of Brinson Askew couldn’t be reached for comment. But Atlanta attorney Robert Lamar of Lamar Archer said the two law firms have collected approximately $18 million in excise taxes from the online travel outfits since the suit settled about seven years ago.

The two firms began handling tax collections and distributions for the online travel companies in Georgia as part of a final settlement of the case, Lamar said.

All taxes collected online are forwarded to the firms, which reconcile them with the travel companies’ transaction records before calculating the taxes and dividing them among the local jurisdictions, he said.

Lamar said his firm and Brinson Askew offered the same arrangement to Airbnb. He said the company turned them down.

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