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What's Going On With AirBnB's Recent Legal Troubles?

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Checking in with the craziest listings on AirBnB has been a Renters Week highlight for the past couple years. This year, though, times are dark for the short-term rental website. In October, Attorney General Eric Schneiderman hit AirBnB with a subpoena to turn over host data on its 225,000 New York City users, 15,000 of which were illegally renting out their apartments (maybe, it's complicated) under the 2011 short term rental law. Internet privacy advocates aren't happy and the site is fighting back both in the court of public opinion by highlighting how much tourist revenue it generates for the city (more on that later), and in the court of actual legal courts by appealing the subpoena. Understandably, though, people are becoming more reticent to use the service than they once were.

Does this spell the end of AirBnB? As much as the city's hotel industry like that outcome, it's highly doubtful. Lawmakers and the Attorney General have repeatedly stated that they are not targeting the "average" AirBnB user—apartment owners who want to rent out a spare room or make a little extra money while they they're out of town—but, in the words of a spokesperson for the Attorney General's office, "highly profitable, illegal businesses that make up a huge chunk of [AirBnB's] corporate revenue." These illegal hotels, such as the now-defunct Hotel Toshi, flaunt the city's laws and, more importantly, often evade the 14.75 percent state occupancy tax for hotels. That tax may be the crux of the matter—AirBnB has said it will work with the city to figure out a way to make sure that users pay what they owe, but it has yet to figure anything out and lawmakers view its offer to help as a "a false promise." With legal troubles mounting, however, AirBnB now has a bit more motivation to try. In any case, even if the city's short term rental laws aren't the most clear and AirBnb has had success fighting against them in the past, this is one fight they're probably not getting away from unscathed.
· AirBnB coverage [Curbed]
· Renters Week 2013 [Curbed]