Business Registration - San Francisco

in
San Francisco, CA
Level 1
2,869 Views

Hi Airbnb family,

 

The Office of Treasurer and Tax Collector sent me a letter a few months back telling me that I had to get a business certificate and make an appointment with Airbnb to turn in my Short-Term Residential Rental Registration. I have since done both. Registered and got a temporary business certicate but never got a permanent one and have turned in all paperwork to Airbnb along with the $50 fee and am now waiting for the local permit/tax ID and yet the letter says that I have yet to respond. 

 

This process all feels a little overwhelming and the letter is now telling me that I still need to register as a business and declare certain information to the Office of the Treasurer and Tax Collector or be obligated to pay taxes monthly and be charged penalities and interest for noncompliance. This does worry me because it says I have until the 19th to reply but I will be out of town from the 16th to the 20th. If anyone can offer additional help or give me a step by step walk through of what next steps I need to take or where else I need to register, provide additional information, etc. it would be much appreciated. Thank you all in advance!

 

 

Annie 

12 Replies

Re: Business Registration - San Francisco

in
San Francisco, CA
Level 1

Hi,

I also registrered as a business after recieving the letter from San Francisco Tax collector and per the information that we need to on Airbnb;s help section.


While responding to the city's request to renew the business registration for 2016/2017, I noticed that the SF treasurer business registration instructions say that we do NOT need to registrer as business if we meet one of 3 criterias. See below - pasted from SF Treasurer web page June 1st 2016:

 

Do  I need to register my business?

San Francisco’s Business and Tax Regulations Code requires that every person engaging in business within the City, regardless of whether such person is subject to taxation, must register within 15 days after commencing business within the City. Upon approval of your application, the Office of the Treasurer and Tax Collector will send a registration certificate, which must be conspicuously displayed at your place of business.

Unless otherwise required, you do not need to register if your only business is the receipt of rental income in connection with the operation of any of the following:

(1)    a cooperative housing corporation, as defined in Section 216(b) of the Internal Revenue Code of 1986, as amended;

(2)    one residential structure consisting of fewer than four units; or

(3)    one residential condominium.

 

http://sftreasurer.org/treasurer/newbizinstructions#Do I need?

 

Very confusing, has the rules changed since October 2015 and the info by then from the city and on Airbnb's helpsection which states that all hosts need to register (https://www.airbnb.com/help/article/1200/san-francisco-tax-collector-letter-background)? 


Have other hosts in SF looked into this and know if we need to be registered as business even when only renting our own apartment for just a few days weeks per year?

 

Thanks,

Sara

Re: Business Registration - San Francisco

in
Boulder, CO
Level 10

Hi @Sara113, To comply with San Francisco's short-term rental law you need to obtain a short-term rental registration number.  A requirement to get the short-term rental registration number is to register your business.  Note the phrase "unless otherwise required..."  in the "do I need to register my business" FAQ below.  Therefore, to operate legally, you do need to register your business.

 

Once you have completed these registrations you will most likely receive a notice from the Office of the Treasurer & Tax Collector to file form 571-R which itemizes business property (beds, lamps, etc.).  A business property tax will be assessed based on form 571-R.  I have not yet received my assessment...  In a nutshell, if you only intend to rent for a couple of weeks a year it is probably not worth the trouble.  The business property tax may wipe out your rental income.  

 

http://sf-planning.org/office-short-term-rental-registry-faqs

 

On October 27th, 2014 Mayor Lee signed San Francisco Ordinance No. 218-14, amending the Administrative and Planning Codes to allow some residential properties to conduct short-term residential rentals without violating the requirements of the City’s Residential Unit Conversion and Demolition Ordinance (Administrative Code Chapter 41A) or the Planning Code. A short-term residential rental is a rental of all or a portion of your residential unit for periods of less than 30 nights. This law became effective on February 1st, 2015, allowing eligible Permanent Residents (owners and tenants) to apply to place their residential unit on the Office of Short-Term Rental’s Short-Term Residential Rental Registry (Mayor's Office press release here).

Re: Business Registration - San Francisco

in
SF, CA
Level 3

I went through the registration process, and I found it quite easy.  Requires a visit to the planning department, but there's a spacial person for the STR and no line, and you can make an appointment.  All the business license stuff is online.

 

As a pretty competitive market, and since I'm renting rooms in my own house where I live, I fully support the regulations and registration, as long as they don't start trying to control my use of my own house.  Right now, I'm losing money because there are lots of people breaking the law and the spirit of AirBnB for home sharing.

 

The reporting mechanism is super burdensome to enter lots of visits, so I'm writing some automation for that to submit reports by paper, but other than that, it's all pretty easy.

Re: Business Registration - San Francisco

in
San Francisco, CA
Level 2

Hi everyone; I'm new using Airbnb and I don't have my registration completed; I'm submitting the paperwork today.

Last week, I got a notice of violation and gentleman from Short-term office is calling and asking to cancel all bookings less than 30 days. What are my options? , Do I need a lawyer? I would appreciate any advise. Thanks 

Re: Business Registration - San Francisco

in
San Francisco, CA
Level 2

What ever happened?  Were you able to get your permit?  Were you charged penalties?  If so, how much?

 

Thanks!

Re: Business Registration - San Francisco

in
San Francisco, CA
Level 1

Hi Aldonso

i received an email from a guy named Omar with the office of short term rentals. I was always under the impression that even if we had not registered once the law passed the city gave us until the end of 2017 to register. I hosted last year and may have gone over  the 90 days now this  guy wants screen shots of last  year. So I legally have to provide these?  If the agreement was reached I May. And we were not required to register what is he asking for last years records? Any help or clarification  would be appreciated.  Thanks R

Re: Business Registration - San Francisco

in
SF, CA
Level 10

@Ryan320, I am not a lawyer, but my impression was hosts were always supposed to be registered prior to doing any short term rentals in San Francisco (once the existing legislation was enacted).

We registered almost a year before we started hosting.

 

If you had heard differently, you should find the source of the information that said it was okay to not register until the end of 2017 and present that as evidence.

 

Best of luck! Once you get everything settled, I'm sure people here would love to have an update so we can learn more about how things are supposed to work.

 

Re: Business Registration - San Francisco

in
San Francisco, CA
Level 2

I finally got the BAN complete and paid the $91.  But read  or was told that we really didn't need to pay that.

Then filed the OSTR through Airnb and paid the $250.  fee.  OSTR got the fee but not the application.  So I resubmited and have no idea if they ever got it.  Just have been told it will be a while before I hear from Omar as they are swamped with people like me who put it off.

3 weeks ago I got 2 identical letters from the Treas. and Tax Collector saying I was delinquent for my registration fee in 2017  for $148.25 and for 2018 for $285.40.  What is that all about?

Just to show good faith, I paid the $148.25 for 2017, but I am going to wait for my Business License to come before I am willing to pay the other.  I think they are mistaken about the 2018.

But that is the easy part.  With my business account number I got a list of Tax/Fee deadlines

Gross Receipts Tax and Payroll Expense Tax filing and Payment

Regulatory License Renewal Payment

Gross Recipts Tax and Payroll Expense Tax Installment  Payments quarterly

Business Personal Property Tax statement (Assessor)

Business Registration Renewal Filing and Payment

Business Personal Property Tax payment

I don't have a clue what all of that is nor do I know what to list, where to do it, etc.  

This is getting to be a nightmare.

If anyone can help me understand so I can comply, it would be most appreciated.

Re: Business Registration - San Francisco

in
SF, CA
Level 10

@Patsy7, we are in San Francisco. We just have the (free to AirBnB hosts) business license and the STR registration. You should already be used to filing property taxes.

Re: Business Registration - San Francisco

in
San Francisco, CA
Level 2

Sure, I file property taxes.  No problem.  But what is the Payroll Expense Tax?  Who is on my payroll?  Housekeeper, gardener, painter, appliance repair?

Where do i get my gross receipts figures to submit to the City?  Is there a special form?  Does Airbnb supply it?

What is personal property?  Do I claim every dresser and nightstand?  Does it include my personal clothing?  Does it include shampoo, the broom? If I use a towel is it personal property or business property?  If my guest uses the same towel how is it allocated?

There is no info on that and I don't know what they want.  

Property tax wasn't my question.  It is clear.  I get the bill every year and pay by the due date.

Re: Business Registration - San Francisco

in
SF, CA
Level 10

@Patsy7, unless you have employees that you pay via Payroll, you don't have a Payroll Expense Tax.

 

Your Gross Receipts is the amount AirBnB sent you. You can find that in your Transaction history, and also on Host Dashboard -> Stats -> Earnings

 

The Personal Property tax is supposed to be a tax on the personal property used to earn money, in this case all the stuff in your AirBnB listing. It does NOT include consumables, but does include durable goods. It is rather silly. Here is a story about it:

 

www.sfchronicle.com/business/article/Airbnb-furniture-tax-generates-120-000-for-8399617.php

 

Re: Business Registration - San Francisco

in
San Francisco, CA
Level 2
According to an employee at SF office of Assessor-Recorder, I was sent the wrong form (571-L)
 
She said I need 571-STR instead. 
And to email askbpp@sfgov.org for the correct form. 
 
This has used up 3 hours of my day, plus screaming at my kids. arrg.
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