May 4, 2017

International Business Times: Who Ends Up Paying for the Gig Economy?

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As the gig economy has grown, the tax gap has widened. Because of inconsistencies in sales tax policies, state and local governments across the U.S. may be missing out on $300 million in annual tax revenues from transportation network companies like Uber and Lyft, according to a March study from the non-profit Institute on Taxation and Economic Policy. The Pew Charitable Trusts echoed that estimate in a mid-April report. Similarly, if Airbnb paid the same state and local taxes as did hotels for all of its U.S. listings, the room share app would’ve coughed up an additional $260 million last year, on top of the $177 million it was estimated to have collected and paid, an October study by the accommodations search engine AllTheRooms found.

But New York City, the ITEP report found, had missed out the most on Airbnb-related taxes, with more than $110 million in estimated foregone revenues in 2014. None of the Big Apple’s five counties were on Airbnb’s list of counties where hosts paid hotel taxes. In the second half of last year, the company spent about $237,000 at the New York State and City levels to lobbying firms involved in efforts related at least in part to “tax collection,” according to a state lobbying file.

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