SF wants Airbnb hosts to pay taxes on beds, stoves and cutlery

The offices of Airbnb are seen in San Francisco last March. The offices of Airbnb are seen in San Francisco last March. Photo: Matthew Millman, New York Times Photo: Matthew Millman, New York Times Image 1 of / 1 Caption Close SF wants Airbnb hosts to pay taxes on beds, stoves and cutlery 1 / 1 Back to Gallery

San Francisco has a message for vacation-rental hosts: You owe more taxes.

Next week the city will notify hosts using services like Airbnb and HomeAway/VRBO that they must submit an itemized list of all the “furniture, appliances, supplies, equipment and fixtures” used in their rentals, specifying the cost and acquisition date. After the assessor’s office calculates depreciation, this “business personal property” will be subject to a tax of slightly over 1 percent of its value.

“We have heard loud and clear from (hosts) that they want to be treated like everybody else and are willing to pay taxes like everybody else,” said Assessor-Recorder Carmen Chu. “They are operating their homes as a business and so we are treating them as we would any other business.”

Offices pay taxes on equipment such as computers, desks and chairs. Restaurants pay on cash registers, tables, chairs, stoves and refrigerators, for instance. Hotels pay on washers and dryers, beds, mattresses, other furniture, sheets, rugs, and so on. (Real estate is separately taxed for both businesses and individuals, and isn’t affected by this new levy.)

For rental hosts, the items to report could range from the furniture and linens in a single bedroom to the entire contents of their house, depending on whether they rent just a room or the whole house. A Chronicle analysis last year showed that two-thirds of about 5,500 Airbnb listings in San Francisco are for entire homes. All 1,400 listings on HomeAway/VRBO and FlipKey are for entire homes.

Even folks who rent out their home only a couple of weeks a year when they are out of town must report the cost of every single stick of furniture, appliance, sheet and towel, including items whose purchase predated the home’s use as a vacation rental. There’s no break for renting infrequently. “Personal property taxes are not prorated,” Chu said.

MBA BY THE BAY: See how an MBA could change your life with SFGATE's interactive directory of Bay Area programs.

The notices will go to roughly 2,000 hosts who applied to the city for a business license, the precursor to registering with the city’s new Office of Short-Term Rentals. Under a law that took effect in February 2015, all short-term rental hosts are supposed to register with the city.

Only a third of the estimated 6,000 or more residents who rent their homes and rooms to travelers have done so. The latest initiative seems likely to deter more of those hosts from complying with the year-old law.

“We hope the letter from the assessor-recorder will not further discourage hosts from registering with the city,” said the Home Sharers Democratic Club, an organization representing a few dozen vacation hosts. Most hosts “want to do the right thing and obey the law.”

Kepa Askenasy, an Airbnb “super host” who rents out four suites in her Potrero Hill home, thinks the request is reasonable as long as there are resources to answer questions. (The assessor’s office said it will do so by phone or in person.)

“I don’t think it will be that hard to do; you just stand in your room and write everything down,” Askenasy said. She purchased most of her furniture over the past 20 years, largely from places like eBay and Craigslist.

Airbnb wasn’t as sanguine.

“Middle-class families shouldn't have to pay extra taxes on their sheets,” the company said. “This invasion of privacy mandates that San Franciscans inventory and pay taxes on every picture frame, towel and spoon in their home.”

Airbnb initially resisted collecting San Francisco’s 14 percent hotel tax. But in October 2014 it began charging it to guests, and later paid back taxes, estimated to be some $25 million. The company now remits hotel taxes in more and more cities as part of its efforts to avoid confrontations with regulators. Those efforts backfired in San Francisco last October when it ran bus-shelter ads snarkily congratulating itself for remitting the tax, which comes from guests, not the company itself.

The good news for hosts: If they bought their furniture and fixtures several years ago, the assessor’s office will calculate depreciation, which will considerably reduce the taxable amount.

“We believe when all is said and done, for many rentals, the assessed values will be quite low,” Chu said.

Form 571-R is due on April 1 but can be submitted up to May 7 without penalty. After that date, the penalty is 10 percent of the total assessed value of the business personal property. For people who ignore the notice, the assessor’s office will estimate their business personal property value and then levy the 10 percent fine on that amount.

Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid