[PDF] Airbnb Agreements with State and Local Tax Agencies

TableofContentsSummaryofReport..............................................................................................................................1SectionA.AirbnbandNeighborhoods:AnIntroductiontotheReport..................................................6SectionB.AirbnbAgreements:ComparisonwithVoluntaryDisclosureAgreements.............................81. WHATARETHEAIRBNBDOCUMENTS?......................................................................................................82. INTRODUCTIONTODESCRIPTIONANDANALYSISOFAGREEMENTS..................................................................93. VOLUNTARYDISCLOSUREAGREEMENTS...................................................................................................114. AIRBNBAGREEMENTS...........................................................................................................................13a. IntroductiontoAgreementsandTheirProvisions....................................................................13b. PerplexingStructureandScopeofAgreements.......................................................................17c. TheFactsNotEstablished - AFailureofBasicAdministrativePractice...................................19d. AccountabilityLost:AirbnbGainsControlofProcess - OperatorResponsibilityDisappears...21e. LessonsfromtheVW"Dieselgate"Scandal..............................................................................24f. PreferentialAmnestyforAirbnbandLodgingOperators.........................................................26g. MultipleLayersofSecrecy........................................................................................................27h. UnjustifiedConfidentialityofAirbnbAgreements....................................................................29i. SummaryofComparisonsofAgreements................................................................................305. WHYALLTHESECRECYINTHEAIRBNBAGREEMENTS?...............................................................................31SectionC.ThePublicImpactoftheAirbnbAgreements......................................................................341. TAXPOLICY:FAIRNESSANDALEVELPLAYINGFIELD...................................................................................34a. UnequalTreatmentofCompliantTaxpayersComparedtoAirbnbandItsOperators.............34b. UnfairCompetitionforTraditionalLodgingFacilities...............................................................35c. UnfairCompetitionforCommunityResidents..........................................................................352. DEMOCRATICGOVERNANCE:INTEGRITY,PUBLICTRANSPARENCY,ANDIMPROPERFAVORITISM........................35a. Integrity....................................................................................................................................35b. TransparencyandPublicParticipation.....................................................................................36c. DotheAgreementsViolateAgencyAuthoritythroughFavoritism?.........................................373. UNDERMININGTHERULEOFLAW...........................................................................................................39SectionD.CommentaryonShort-TermRentalLegislation..................................................................41SectionE.AchievingEquityandIntegrityinShort-TermRentalTaxation............................................441. ACTIONBYTAXAGENCIES.....................................................................................................................44a. SupportforPositiveLegislation................................................................................................44b. AComprehensiveTaxComplianceProgram.............................................................................45c. PublicParticipationandReevaluationbyTaxAgencieswithAirbnbAgreements...................462. ACTIONBYSTATELEGISLATURES............................................................................................................473. ACTIONBYCOMMUNITYANDBUSINESSORGANIZATIONS...........................................................................47Appendix.RatingtheTaxAgreements................................................................................................49

ListofTablesTable1.AirbnbAgreementsbyState - ListedAlphabetically..............................................................13Table2.ProblematicProvisionsofAirbnbAgreementsbyJurisdiction...............................................16Table3.ComparisonofTaxpayerResponsibilitiesandBenefitsforVoluntaryDisclosureAgreementsandAirbnbAgreements.................................................................................................................18-19Table4.SecrecyProvisionsinAirbnbAgreements..............................................................................27Table5.RatingsofAirbnbAgreementsCombinedwithSupplementalMeasures................................50GlossaryofTermsTermDefinitionAirbnbagreementsAnagreementbetweenAirbnbandastateorlocalgovernment,labeled"VoluntaryCollectionAgreement,"thatpertainstolodgingtaxesamongothermatters.Becauseofthenatureandextentoftheircontent,theyarereferredtohereinsimplyas"Airbnbagreements."Commercial-styleshort-termrentalorlodgingAshort-termresidentialrentalorlodgingfacilityinwhichtheoperatordoesnotresideand(a)thatisofferedonafull-timebasisyear-roundorduringlongseasons,or(b)isamulti-unitoperationwithtwoormoreunits.Home-sharingAshort-termresidentialrentalorlodgingfacilityinwhichtheoperatordoesresideandthatistypicallyofferedonanoccasionalbasistooccupants.LodgingoperatorAnownerorlong-termlesseewhooffersandrentsashort-termresidentialrentalorlodgingfacilitytomembersofthepublic.Airbnbreferstolodgingoperatorsas"hosts"intheiragreements,but"lodgingoperator"istheobjectiveterminbusinessandtaxcontexts.LodgingoperatoridentificationserviceAsoftwarebasedservicethatidentifiesandlocateslodgingoperatorstoassistgovernmentswithlodgingtaxandregulatorycompliance.Atleastoneserviceexists,andothersmayemerge.OccupantApersonwhorentsashort-termrentalfromalodgingoperator.Airbnbreferstothesepersonsas"guests"intheiragreements,but"occupant"istheobjectiveterminbusinessandtaxcontexts.VoluntarydisclosureagreementsAgreementsbetweenastateandpreviouslynon-complianttaxpayerstobringthemintocompliancewithtaxlaws.Theytypicallyinvolvethepaymentofsomeyearsofbacktaxeswithinterest,butnopenaltiesandacommitmenttopaytaxesprospectively,subjecttonormalrequirementsthatapplytoalltaxpayers.TheMultistateTaxCommission(MTC)coordinatessuchagreementsformultistatetaxpayersworkingwithseveralstatesatonce.Individualstatesalsoofferagreementsforresidents,in-statebusinessesandmultistatebusinessespreferringtoworkwiththestatedirectly.

1SummaryofReportSubjectThisreportevaluatestwelvepubliclyreleasedagreementsthatAirbnbhasenteredwithstateorlocalgovernmentsthatdirectlyaddresslodgingtaxes,buthaveimpactsonotherstateandlocallaws.Theagreementsarefromacrossthenationandhaveeffectivedatesrangingfrom2014into2017.Becauseoftheirvariationsingeographyandtime,thereportassumesthatthese12agreementsarereasonablyrepresentativeofthelargerbodyofapproximately200agreementsthatAirbnbhassigned.ThelargemajorityofAirbnbagreementsarebeingheldsecretfromthepublic.MethodologyTheevaluationisconductedbyexaminingthelanguageoftheAirbnbagreementsinrelationtovoluntarydisclosuretaxagreements,standardsofpublicadministrationanddemocraticgovernance,andcompliancewiththelaw.Inonecircumstance,thereportevaluatesa"sidearrangement"describedinaninterviewwithataxagency.Focusingonthelanguageoftheagreementsprovidesadefiniteandconcretebasisforevaluation.Criticsmayarguethatthisapproachdoesnottakeaccountofverbalunderstandingsorothervariationsfromwrittenlanguageusedtoavoidproblemscreatedbythetextoftheagreements.Iftheagreementsareadministereddifferentlyfromtheirtext,thatlanguageshouldbeamendedaccordingly.ContextAirbnb,foundedin2008,provideslodgingbysupportingandmarketinganetworkoflodgingfacilities.Airbnbstatesthatitoffers3,000,000listingsin65,000citiesin191countries.Airbnbbeganwithandcontinuestocultivateanimageofoffering"home-sharing"rentals - lodginginpeople'shomeswheretheownersorlong-termlesseesreside.Increasingly,however,Airbnb'sgrowthisdependenton"commercial-style"operationswheretheholderofthepropertydoesnotresideinit,butoperatesalodgingbusinessbasedinaseparatehomeoroneormoreapartmentsavailablefortransientrentalyear-round."Home-sharing"isoftenlegalunderlocalzoningandhousinglaws."Commercial-style"transientresidentialrentalsoftenviolatezoningandhousinglaws.ImmediateActionNeededThereportdetailsmajorproblemsthattheAirbnbagreementscreateintermsof:• UnjustifiedfavoritismforAirbnbanditslodgingoperators,• ImproperlycedingtaxauthoritytoAirbnb,• Grantinghugebenefitstothird-partieswhohavenotsignedtheagreements,• Unfairtreatmentofothertaxpayers,businessesandcitizens,• Violatingstandardsoftransparencyanddemocraticgovernance,• Underminingcompliancewithtaxandregulatorylaws,and• Spreadingundesirableprecedentsthroughstatelawspatternedaftertheagreements.Becauseoftheseriousproblemscreatedbytheagreements,thereportrecommendsthattaxagenciesstopsigningAirbnbagreementsandopposelegislationthatwouldincorporatethosefeaturesinlaw.Agenciesthathavesignedthoseagreementsshouldreevalutethemandconsiderterminaton.Asabetteralternative,agenciesshouldseeklegislationupdatinglodgingtaxlawstoensurepropercomplianceandundertakeacomprehensivelodgingtaxcomplianceprogram.

2FindingsandImpactsMajorfindingsinthereportinclude:• TheAirbnbagreementsaremorethantaxagreements.Theyare,infact,wide-rangingspecialrulesbenefittingAirbnbanditslodgingoperators.Thereisnoproprietaryorconfidentialinformationintheseagreements(oranycomparableonesthathavenotbeenreleased)thatjustifywithholdingthemfromthepublic.Thepoliciesintheseagreementsshouldbetreatedasrulessubjecttopublicdisclosure,scrutinyandparticipation.• Thestructureoftheseagreementsisperplexingandshouldbereviewedforlegality.Theagreementsprovidemajorbenefitstothird-parties,especiallylodgingoperators,whoarenotsignatoriesoftheagreementanddonotcommittoanyperformanceinexchangeforbenefitsreceived.• TheAirbnbagreementsdonotguaranteeaccountabilityfortheproperpaymentoflodgingtaxesbecausetaxagenciescedesubstantialcontrolofthepaymentandauditprocessestoAirbnb.Theagreementsprovideashieldofsecrecyforlodgingoperatorsthatpreventstheirdiscoverybypublicagenciesandcreatesadefactotaxandregulatoryhavenforthoseoperators.• TheAirbnbagreementsprovideoverlygenerousandunjustifiedbenefitstoAirbnbanditslodgingoperatorsandoccupantsascomparedtothebenefitsprovidedtaxpayersenteringvoluntarydisclosureagreements.Inaccordancewithobservationthat"badpracticesdriveoutgoodones,"thenegativeprecedentsintheAirbnbagreementsthreatentounderminetheuseofvoluntarydisclosureagreementsthathaveyieldedlargerevenue,taxequityandcompliancebenefits.• Byagreeingtoprospectivelodgingtaxpayments,theaccuracyofwhichcannotbefullyverified,Airbnb"purchases"fromtaxagenciesashieldofsecrecythatthey"resell"tolodgingoperatorstoattractmoreownersorlong-termlesseesofresidentialpropertytoconductAirbnblodgingbusinesses.Thatsecrecyismostvaluableforthecommercial-stylelodgingfacilitiesthatnowfuelAirbnb'sgrowth,butthatarealsomostlikelytoviolatezoningandhousinglaws.Thus,theagreementsfacilitateunimpededandoftenillegalconversionsofresidentialpropertyintocommercial-stylelodgingfacilities.Taxagenciessigningtheseagreementsenablethisprocess.• TheAirbnbagreements,becauseoftheunjustifiedbenefitsprovided,areunfairtotaxpayerswhofileandpaytheirtaxesdiligently.TheagreementsalsoallowAirbnblodgingtocompeteunfairlywithtraditionallodgingfacilities.Finally,theagreementsprovideunfaircompetitionforcommunityresidentsandcitizensseekingaplacetolive.• TheAirbnbagreementsconflictwithstandardsofdemocraticgovernancedesignedtoensureintegrityinpublicpolicyandcivilsociety.Theyfailtoconformtorequirementsoftransparencyandpublicparticipationindecision-making.TheagreementsalsoviolateagencyauthoritythroughfavoritismofferedAirbnbanditslodgingoperatorsandoccupants.• Intermsoffavoritism,taxagenciesshouldbeespeciallyconcernedaboutsuspendingexchangeofinformationprocessesrelatedtoAirbnbanditslodgingoperators.Beyondquestionsoflegality,agenciesshouldconsidertheimpactofwithholdinginformationfromotheragenciesintermsofadverselyaffectingthecooperationtheyreceivefromotheragenciesinthefuture - cooperationthatisimportanttopropertaxadministrationandbroaderenforcementofotherlaws.

3• TheAirbnbagreementsunderminetheruleoflaw.Theagreementscreaterisksofreducedcompliancewithlodgingtaxlaws,withstateandlocaltaxlawsmoregenerally,andwithlocallanduse,housingandbuildingsafetylaws.• TheAirbnbagreementshaveproducedlegislationinArizonaandconsiderationofsimilaractioninotherstates.ThelawundermineslocallanduseandzoningregulationsthatmightaffectAirbnbbyseverelynarrowinglocalregulatoryauthority.Thelawmakesthenegativetaxprecedentsintheagreementsvisibleandcreatesincentivesforothertaxpayerstolobbyforthosesamebenefits.ThelawcodifiestheanonymousdatareportingthatunderminesAirbnb'staxaccountability.ItalsoblockstheexchangeofAirbnbinformationwiththeIRSandtaxagenciesofotherstates.Fortheexchangeofinformationthatdoesremain,thelawrequiresnotificationofAirbnbofpotentialexchangesandgivesitthepowertoreachintothetaxagencyandblockthatexchangeofinformation.• SigningAirbnbagreementsofthetypecoveredhereintroducesharmfulpracticesintothepubliclifeofstatesandcommunities.LegislationincorporatingAirbnb'sunjustifiedprivilegesintolawonlyspreadsthedamagefurther.Ifthesepracticesareexpandedinlawtootherbusinesses,theconsequencesforstatesandlocalitiesbecomesevere.Recommendations• Asnoted,thereportrecommendsthatagenciesstopsigningagreementslikethosecoveredbythisreportandopposeanylegislationthatwouldenactthoseprovisionsintolaw.Agencieswithexistingagreementsshouldconsiderterminatingthem.• Taxagenciesshouldseeklegislationupdatinglodgingtaxlawstorequireregistration,reportingandcollectionandpaymentbyonlinebookingcompaniesandlodgingoperators,withasinglepaymentprocesscoordinatedasitisforsalestaxesbetweenwholesalers(here,lodgingoperators)andretailers(onlinebookingcompanies).Giventhecommunityandneighborhoodimpactsofshort-termrentals,thelegislationshouldincludeapublicregistryoflodgingfacilitiesabovespecificthresholds.Thelegislationshouldstrengthen,wherenecessary,exchangeofinformationforlodgingtaxesgiventhesignificanceofthatinformationforregulatoryenforcement.• Alternatively,ifnothingelseisdone,legislationshouldbeenactedthatrequiresonlinebookingcompaniestoprovidethenamesandlocationsoflodgingoperatorstotaxagencies.• Taxagenciesshouldundertakeacomprehensivecomplianceprogramunderexistinglawwiththreeelements:(a)joint,multistateauditsofonlinebookingcompaniesforrelevanttaxestodeterminewhetherthecompanieshavealegaldutytofile,collectandpaytaxes,(b)jointorindividualcontractswithalodgingprovideridentificationservice,atleastoneofwhichcurrentlyexists(HostCompliance),and(c)acampaigntooffervoluntarydisclosureagreementstolodgingproviderstocomeintocompliancewithlodgingtaxlaws.• Taxagencieswithexistingagreementsshouldpubliclyreleasetheagreementstotheextentthattheyincludenoconfidentialorproprietaryinformation.Ifanysuchconfidentialinformationispresent,thatinformationshouldberedactedandthenon-sensitivematerialconstitutingpoliciesshouldbereleasedandsubjecttoapublicrule-makingprocessasapartofareconsiderationprocess.• Legislaturesshouldenactthelegislationdescribedabove.• CommunityandbusinessorganizationsshouldundertakeconcertedanddetailedopenrecordsrequestsforthereleaseofAirbnbagreements,withredactionforanyconfidentialinformation.Thegroupsshouldbepreparedtoundertakefollow-uplegalactionifrequestsaredenied.

4• Whenagreementsarereleased,communityandbusinessgroupsshouldpetitionforanyprovisionsthatconstituterulestobesubjecttopublicrule-makingprocesses.Ifrule-makingdoesnotproceedonsuchmatters,follow-uplegalactionshouldbeconsidered.• Thegroupsshouldactivelysupportthelegislativeandadministrativeactionsdescribedabove.ThereismuchdetailinthisreportconcerningextensiveproblemsoftheAirbnbagreements.However,thecoreproblemwiththeseagreementsissimplytoomuchsecrecy.Secrecyallowslodgingoperatorstorunhotelsthatviolatezoninglaws,avoidpublichealthandsafetystandards,andreducethecurrenthousingsupplyforlong-termresidents.SecrecyallowsAirbnb,ifitdecidedtodoso,toavoidaccountabilityfortaxesandeventomakeill-gottengainsfromtaxcollection.Airbnbfirstcreatesthesecrecyproblembyhidinglodgingaddressesontheirwebsite,makingitdifficultforstateandlocalauthoritiestoidentifythefacilitiesandtheirowners.Airbnbthenoffersagreementsasasolution.Buttheagreementsonlymaketheproblemsworse.TheAirbnbagreementsextendsecrecyfurther,givingitanunfairadvantageinlodgingmarketsbyofferingataxandregulatoryshieldtoaffiliatedlodgingoperators.Thesolutiontosecrecyistoendit,notextendit,astoomanystatesandlocalitiesarehelpingAirbnbdothroughtheseagreements.Itisstandardpracticetorequiretransparencyforbusinessesoperatinginstatesandlocalities.Publicregistrationtodobusinessisacenturies-oldstapleoftaxation,regulationandlawenforcement.Itisabsurdtoallowanyonetooperatealodgingbusinessinaneighborhoodandnotregisterthatbusinessinapublicregistry.Itisworsetodenyzoningofficials,taxcollectors,policeofficersandfirefightersbasicinformationtheyneedtodotheirjobsregardingissuesrelatedtolodgingfacilities.Itisalsounacceptablethatlong-termresidentswilloftennotknowtheywillbelivingnextdoortotransienthousinginsteadofhavingneighborstowhomtheycanrelateandrely.Allthatneedstobedoneistorequirelodgingoperatorstoregistertheirbusinessespublicly - akintorequirementsforotherin-homebusinesses - andtorequireonlinebookingcompanieslikeAirbnbtoprovidealistofitsaffiliatedoperatorstostateandlocaltaxauthorities.ThesolutiontotaxsecrecyforAirbnbisequallysimple.RequireAirbnbtofiletaxreturnsbasedonrealdatainsteadofanonymousnumbersthatcouldbefactorfiction.Rejectauditrulesthatleaveauditorsstaringatalreadyfiledreturns,supportingschedulesandunverifiablesheetsofnumbers.RequireAirbnbtoprovideitsrealbooksandrecordsforauditorstoexaminejustthesameasallothertaxpayersarerequiredtodo.AnonymousdataandlockingupAirbnb'sbooksandrecordsinvitestaxabuses,evenallowingthecompany,ifitdecidedtodoso,tomakeprofitscharginggueststhefulltaxandpayingstateandlocalgovernmentslesseramounts.AllthatisnecessaryistoaskAirbnbtoplaybythesamerulesfortaxreporting,paymentandauditingthatapplytoeveryoneelse - andforstatesandlocalitiestoconductefficient,effectiveandfairaudits.Thereisathirdproblemofsecrecy.ToomanygovernmentsaresigningsecretagreementswithAirbnbthatare,intruth,theequivalentoflawsandrules.Agenciesshouldreleasetheseagreements,andifnotmembersofthepublicshouldchallengethissecrecyandrequesttheirrelease.Therulesshouldbebroughtintotheopenairandbrightsunshine - aslawsonpublicparticipationandstateconstitutionsrequire - sothepubliccanhaveasayonwhetherAirbnbgetsspecialruleswithspecialbenefitsorwhetheritwillbeaskedtofollowthesamerulesthatapplyto

6SectionA.AirbnbandNeighborhoods:AnIntroductiontotheReportWefancyourselvesoutlawswhileweshapelawsandconsiderourselvesdisruptivewithoutsufficientconsiderationforthepeopleandinstitutionswedisrupt.Wehavetodobetter,andwewill--AnilDash,a"technologist"commentingonthetechindustry,quotedbyKristaTippettontheradioshow,OnBeing,January12,2017.AnilDash'swordsareawelcomecorrectiontothetechnologyindustry'scontinuouscelebrationofits"disruptive"capacity.DisruptingoldindustriesthatemployedAmerica'soncethrivingmiddleclassisthetechindustry'sfavoredmodeofoperation.Itproceedsbyextracting,notall,butkeyelementsofthecraftknowledgepreviouslyspreadwidelyamongworkersandmanagersintheoldindustries - craftknowledgethatguidedtheiroperationsandsuccess.Thetechindustryextractsthatcraftknowledge,reformulatesandconcentratesitintocomputercode,andusingthatsoftwaredeploysnewenterprisesto"disrupt"oldindustries."Displace"isanotherwordfortheprocess.Theknowledgefirstdevelopedintheoldindustriesisturnedagainsttheminanewform.Theprocessofdisruptionthroughtechnologyhasconcentratedenormouswealthwiththetechelite.Ithasalsocreatednewjobs,buttypicallyfewerthanthoselostandoftenclusteredinafewmetropolitanareas.Theprocesshasbeenlesskindtotheoldindustries'formerworkerswhosejobshavebeendisruptedaway.Tobefair,theworkers'problemsdonotcomesolelyfromtechnologicaldisruption - globalization(anothertechfavorite)andtaxandlabormarketpolicieshavealsoplayedarole.Buttechnologicaldisruptionisabigpartofthestory.Theresultscanbeseen,inpart,inthefortyyearsofstagnantorevendecliningrealincomesformiddleclasshouseholds.Theresultscanalsobeseeninthe"populist"angerarisinginthepastyearfromcommunitiesspreadacrossthenation - notablyafardistancefromtechcenters.Airbnb,acompanyfoundedonlyeightyearsago,andotheronlinecompaniesofferingpeer-topeermarketplacesforshort-termrentalcompaniesareinthebusinessofdisruptingthelodgingindustry.Airbnbisthepeer-to-peerleaderwith3,000,000listingsin65,000citiesand191countries.1Somewhatironically,thecompanypublicizesitselfashelpinghard-pressedmembersofthemiddleclassearnextraincomebyrentingsparespaceintheirhomesonanoccasionalbasistotravelers.Initsearlyyears,Airbnb'simagewaslikelyconsistentwithitsreality.Recentdata,though,suggeststhatimageisblurringintomythasarisingshareofitsrevenuecomesfromcommercial-styleoperationsinsteadofoccasionalhome-sharing.OnestudyofAirbnbbookingsin14majorcitiesindicatesthatfull-timeandmulti-unitoperationsaccountedfor40%ofAirbnb'srevenuefromOctober2014throughSeptember2015.2ItisunderstandablethatatsomepointAirbnbandsimilarcompanieswouldreachtheouterlimitsofthenumberofpeoplewhosepersonalcircumstancesaresuchthattheywouldengageinhome-sharing.Toachievefurthergrowthandmarketshare,Airbnbismovingbeyondhome-sharingtolistingsofhousesandapartmentsoperatedascommerciallodgingbusinesses.1"AboutUs-Airbnb,"Airbnb.com.RetrievedJanuary16,2017.2JohnW.O'NeillandYuxiaOuyang,"FromAirMattressestoUnregulatedBusiness:AnAnalysisoftheOtherSideofAirbnb,"PennStateUniversity,SchoolofHospitalityManagement,January2016.

7Theconversionofhousesandapartmentsnotoccupiedbytheirownersorlong-termlesseesintoshort-termlodgingfacilitiescreatesmajorcommunitycontroversies.3Chargesariseover"illegalhotels" - chargesthataretrueifthefacilitiesviolatezoningordinances,occupancystandards,buildingandfirecodesandotherhousinglaws.Criticsclaimthisconversionofresidentialpropertyintoshort-termrentalsreducesthesupplyandincreasesthecostofplacestoliveforordinarycitizens,thusreducinghousingaffordability - especiallyinmarketswithashortsupplyofresidencesrelativetodemand.Othersraiseissuesaboutpublichealthandsafetyissuesaffectingresidentialneighborhoodsandstretchingpoliceandotherpublicsafetyresourcesmorethinlyacrosscommunity.Long-termresidentsareconcernedthatasneighborsarereplacedbytransientvisitors,thehumanrelationshipsandcommunitylifeonwhichtheyrelywillbelost.Airbnb,foritspart,oftenvigorouslydisputestheseconcernsdirectlyandrespondsindirectlybycultivatingabrandimageofsharing,trustandbelonging.Controversiesovershort-termrentalshaveproducedlitigationandregulatoryandlegislativeactionintheUnitedStatesandonaglobalbasis.Someofthemostwell-knownconflictshaveoccurredinNewYork,SanFrancisco,Vancouver,BC,andBerlinamongotherlocations.IntothecontextofcontroversyintheUnitedStates,Airbnbhasinsertedacampaignofferingstateandlocalgovernmentsagreements,whichitdescribesasprovidingforAirbnb'sprospectivecollectionoflodgingtaxesthatapplytoitsrentaltransactionsintheirjurisdictions.Thisreportanalyzestwelveagreementsthathavebeenpubliclyreleased.Airbnbclaimstohaveentered200suchagreementsandhopestosign500morein2017.4Theanalysisproceedsbycomparingtheagreementstowell-established"voluntarydisclosureagreements"thatstatesusetosecuretaxcompliancebybusinessesandindividualswhohavenotbeencollecting,filingandpayingtaxes.Theseagreementsarecarefullydesignedtoencouragevoluntarycompliancebynon-filers,whilestillretainingsufficientsanctionstomakenon-complianceunattractiveandensuringfairnesstotaxpayersfullycompliantwiththelaw.WeevaluatetheAirbnbagreementsastowhethertheyservetheirintendedpurposesorotherunstatedpurposes,whethertheyarefairoveralltotaxpayersandcommunityresidents,andwhethertheyconformtostandardsofintegrityandeffectivenessintaxation.Chiefamongthosestandardsistheabilityofataxagencytoholdataxpayeraccountableforpayingtherightamountoftaxes.Morebroadly,attentionisgiventowhethertheagreementssupporttheruleoflawbyensuringpropercompliancewithallapplicablelaws.Wealsoevaluatetheagreementtodetermineiftaxagencies,inenteringtheagreements,areadheringtorequirementsfortransparency,publicparticipationindecision-making,andaccountabilitytothepublic.3AreportbytheNewYorkAttorneyGeneralprovideswell-organizeddocumentationofcomplaintsaboutcommercial-stylerentalsofferedthroughAirbnb.SeeNewYorkOfficeofAttorneyGeneral,"AirbnbintheCity,"October2014,availableathttps://ag.ny.gov/pdfs/Airbnb%20report.pdf.4LeslieHook,"Airbnblookstosecure700taxdealswithcities,"FinancialTimes,November20,2016.

8SectionBAirbnbAgreements:ComparisonwithVoluntaryDisclosureAgreements1. WhatAretheAirbnbDocuments?Airbnbdevisesandpresentstotaxagencieswhataretypicallytentotwelve-pagedocumentscoveringback-taxforgiveness,prospectivepayments,informationaccessandmultipleothertermsthatproduce,asthisreportdocuments,seriousnegativeconsequencesforsociety.Airbnblabelsthesedocumentsas"voluntarycollectionagreements,"whichtheymostassuredlyarenot.TheseAirbnb-drafteddocumentsdonotguaranteethepropercollectionoftaxesdue.TheyblocktaxagenciesfromverifyingtheaccuracyofAirbnbpayments.Airbnbmaybeseekingtosuperficiallytolikenthesedocumentstothehighquality"voluntarydisclosureagreements"thatstatesusetobringnon-complianttaxpayersintofullconformitywiththelaw.However,thesedocumentsprofoundlyunderminesoundtaxadministrationandtheruleoflaw.Fortheseandotherreasonsdetailedbelow,wewillnotuseAirbnb'smisleadinglabelforthesedocumentsbutwillrefertothemobjectivelyas"Airbnbagreements."BeyondnotbeingwhatAirbnbclaimsforthem,theagreementsdonotevenqualifymoregenerallyas"taxsettlements."Ataxsettlementresolvesataxdisputebetweenonetaxpayerandataxagencyandoftenincludesproprietaryorconfidentialtaxinformation.Withafewexceptions,theseagreementsdonotappeartobepromptedbyataxdisputearisingfromanauditorlegalactionbyataxauthority.Noneoftheagreementsreleasedpubliclyrefertoanysuchdisputesorcontainreferencestobeingenteredundertheauthorityoftaxsettlementlaws.Theydonot,astaxsettlementsnormallydo,specifyagreeduponamountsofvalues,incomeortaxes.Noneofthepubliclyreleasedagreements,eveniftheycontainconfidentialityclauses,includeanyproprietaryorconfidentialtaxinformation.Further,theseagreementsarenotsimplybetweenataxagencyandonetaxpayerbecausetheyprovidesubstantialtaxbenefitstoalargeclassofunknownnumbersofAirbnblodgingoperatorsandoccupants.Finally,asexplainedbelowtheseagreementsrangefarbeyondthecontentoftaxsettlementsintermsofthescopeoflaws,practicesandpartiesaffected.WhatisthenatureoftheseAirbnbagreements?RegardlessofhowAirbnbcharacterizesthem,theagreementsare,intruth,rulesthatgrantspecialadvantagestoonetaxpayeranditscustomers.Theyarerulesbecausetheyembodymultipledecisionsthatsprawlacrossarangeoftaxpolicyandadministrativeissues,includingbutnotlimitedto:• grantingtaxandregulatorybenefitstoaclasscomprisedoflargenumbersofunidentifiedbeneficiarieswhoarenotsignatoriesoftheagreements,• creatingunusual,ifnotunprecedented,limitsontaxadministrationthatunderminetheproperaccountabilityfortaxescollected,reportedandpaid,• limitingtheinformationavailabletootheragenciestoenforcelawsthataffectpublichealthandsafetyandthequalityofcommunitylife,and• restrictingtheabilityofthepublicandotheragenciestoknowaboutandparticipateindecision-makingaboutthepublicpolicyjudgmentsbeingmadeintheagreements.Theserulesshouldbesubjecttoconsiderationthroughopen,publicparticipationprocesses.Bringingtheseprovisionsoutoftheshadowsandintothepublicsquareforscrutinyanddebateis

9evenmorecompellingwhenoneconsiderstheirimpactontaxequity,marketcompetition,theintegrityoftaxadministration,publichealthandsafetyandthewell-beingofcommunityresidents.Whiletheagreementsare,infact,rules,theyalsorepresentaspecialdeal.TheyallowAirbnbunusualandlegallyquestionablelatitudetodeterminehowmuchtheywillpayintaxes.SeveralagreementsgrantspecialtaxamnestytoAirbnblodgingoperatorsandoccupantseventhoughtheyhaveneitherrequesteditnorsignedtheagreements.TheagreementsprovideseverallayersofsecrecytoshieldAirbnblodgingoperatorsandoccupantsfromcomplyingwithanarrayoflaws.TheshieldofsecrecyforAirbnbcustomersenablesAirbnbtounfairlyexpanditsmarketsharewithinthelodgingindustryanddiverthousingstockawayfromordinarycitizenswhomerelywanttofindaplacetolive.TheAirbnbagreementsspecifytermsthatcutacrossanarrayoftaxpoliciesandpracticestobenefitAirbnbanditsnetworkoflodgingoperators.Itprovidesgeneralrulesskewedtoserveprivateintereststothedetrimentofthepublicinterest.Disturbingly,toomanytaxagenciesagreetoworkwithAirbnbtoclothetheseeffortsinsecrecylesstheybediscoveredandrespondedtobythepublic.Fortunately,effortstokeeptheseagreementssecrethasnotbeenentirelysuccessful.2. IntroductiontoDescriptionandAnalysisofAgreementsThissectionofthereportcomparesandcontrastsAirbnbagreementswithvoluntarydisclosureagreements.Voluntarydisclosureagreementshavebecomeahighlysuccessful,equitableandfiscallyadvantageousmethodforbringingnon-complianttaxpayersintocompliancewiththelaw.Voluntarydisclosureagreementsarethe"goldstandard"oftaxcomplianceagreements.Wewillmakethiscomparisonforthreereasons:• Ithelpstounderstandhow,despitesomesimilarities,theAirbnbagreementsdivergeradicallyfromandextendbeyondthebesttaxcompliancepracticesembodiedinvoluntarydisclosureagreements;• IthelpsrevealthetaxinequitiescreatedbytheAirbnbagreements,and• ItdisclosestherealfunctionoftheAirbnbagreementsisnottoensuretheproperpaymentsoftaxes,buttohelpAirbnbexpanditsshareofthelodgingmarketattheexpenseofcompetitors.Theanalysisinthesesectionisnotthefullstory.ThissectionfocusesonprovidingageneralknowledgeoftheAirbnbagreementsandexploringhowtheymeasureupagainstthetaxequitystandardofequaltreatmentofsimilarlysituatedtaxpayers.InSectionC,wewillconsiderthebroaderimpactsoftheAirbnbagreementsoneconomiccompetition,effectivetaxadministration,democraticgovernance,andtheruleoflaw.Therearesomesurfacesimilaritiesbetweenthesetwotypesofagreements.BoththeAirbnbagreementsandvoluntarydisclosureagreementsfacilitatepaymentsfortaxesnotcurrentlybeingcollected.Bothtypesofagreementsappeartohaveasimilarframework:arecitationoffactsbythepersonorbusinessfollowedbyconcessions,usuallybythetaxagencytoinducethetaxcollectionpayments.EvensomeofthewordsareborrowedfromvoluntarydisclosureagreementsforuseintheAirbnbagreements.Oncebelowthesurface,however,thetermsvarysignificantlybetweenthetwo.

10ThegreatestsimilaritiesbetweenthevoluntarydisclosureagreementsandtheAirbnbagreementsarefoundnotintheirtermsbutinthecircumstancesofthepersonsandbusinessesbenefittingfromthetwotypesofagreements.Alodgingoperatorlocatedinataxingjurisdictionwhoexceedslodgingtaxreportingthresholdsandwhofailstofileandpaylodgingtaxesisinanidenticalsituationasaresidentorbusinesslocatedinthetaxingjurisdictionwhofailstofileandpayincomeorsalestaxes.Theselodgingoperatorsownpropertyandareconductinglodgingbusinessinthetaxingjurisdiction.Undertheprincipleoftreatingtaxpayersinidenticalcircumstancesequally,thenetbenefitsreceivedfromataxagreementshouldbethesameforalodgingoperatornon-compliantwithlodgingtaxesasitisforapersonorbusinessnon-compliantwithsalesorincometaxes.ThereisnoreasonAirbnboperatorsandoccupantsshouldbetreatedmorefavorablythantaxpayerswhoparticipateinvoluntarydisclosureagreements.ThereisalsoasimilaritybetweenAirbnbandmultistateormultinationaltaxpayersenteringvoluntarydisclosureagreements.UnderU.S.constitutionalstandards,out-of-statecompaniesmusthavesufficientcontactswithastateforthatstatetorequirethecompanytocollect,fileandpaytaxes.Ifthenatureofacompany'scontactswiththestatemeetconstitutionaltests,thecompanyissaidtohavenexuswiththestateandis,therefore,subjecttothestate'sjurisdiction.Multistatebusinessesthatseekvoluntarydisclosureagreementsforincomeorsalestaxesaretypicallythosewhosecontactswithastatemakeitsubjecttoeitherdefiniteorprobablejurisdictionforthatstate'staxes.Airbnb'scontactswithmanystatesappearsufficientconstitutionallytorequireittocollect,fileandpaystatetaxes.ThecaseforAirbnbhavingnexuswithstatesissubstantial:1. Airbnb'sbusinessandearningsintheUnitedStatesarefullydependentonitsaffiliationwithlocallodgingoperators,52. Airbnb,byitsownstatementsonitswebsite,contractswithphotographers,translatorsandotherproviderswhoprovideservicesinsupportoflodgingwithinthestates,6and3. Airbnbisservingasanegotiatingagentforitslodgingoperatorsandoccupantsfortaxagreementsinmoststates.IfAirbnbmadeaproperdisclosureoffactsorifitweresubjecttoanexusaudit,itislikelythatotherfactssupportingnexuswouldbefound.BecauseAirbnbandmultistatebusinessesseekingvoluntarydisclosureagreementsaresubstantiallysimilarinconstitutionalterms,itispropertocomparethetwo.Observerswilllikelynotethat,onstatelawgrounds,Airbnbmaybelessobligatedtocollectandpaylodgingtaxesbecausethoselawshavenotkeptupwithchangingtechnologyandbusinessoperations - thusfailingtoensurethatlodgingprovidedtoconsumersthroughbusinessnetworksorganizedviaautomatedsystemsistaxedfairly,efficientlyandeffectively.However,thatstatutory5Stateshavesuccessfullyasserted"affiliatenexus"regardingout-of-statecompanieswithin-stateaffiliateswheretheaffiliatesarelesscentraltotheout-of-statecompanythantheAirbnblodgingoperatorsaretoAirbnb.Airbnbcannotconductitsbusinesswithoutthein-statelodgingoperatorsandtheirproperty.6See:https://www.airbnb.com/help/article/414/should-i-expect-to-receive-a-tax-form-from-airbnb?topic=248.

11problemcanberemediedbystatesorlocalitiesthroughlegislativeaction - abetteralternativethanenteringseriouslyflawedtaxagreementsthatdamagethepublicinterest.Analytically,itisnecessarythatthisstatutoryissuebeheldinabeyancesothatthepublicandpolicy-makerscanseethedifferenceinthechoicebetweenlegislativelyupdatinglodgingtaxesandtheadministrativelyadoptedAirbnbagreements.3. VoluntaryDisclosureAgreementsWhilevoluntarytaxdisclosureagreementshaveexistedinsomeformforalongtime,stateshaveusedthemmoreextensivelysincethelate1980s.Changesininterstatebusinessoperationscombinedwithambiguitiesinthecircumstancesunderwhichstatescouldtaxinterstateeconomicactivityproducedgreateruseoftheseagreements.TheMultistateTaxCommission(MTC)contributedsignificantlytothetrendbyestablishingtheNationalNexusProgram,whichcoordinatesdisclosureagreementsbetweeninterstatebusinessesandmultiplestates.Statestypicallyofferwithintheirstatessimilaragreementstonon-filingresidentsandlocalbusinesses.Statevoluntarydisclosureagreementshaveproducedimpressiveresults.IntenyearsfromFY2006-2015,theMTC'svoluntarydisclosuresproducedover$197millioninback-taxpaymentsnotincludinginterestorfuturetaxpayments.7Usingaconservativemethodology,thereportestimatestotalrevenuesfromthesemultistateagreementslikelyexceeded$500millionoverthisdecade.8Theseamountsdonotincludethemajorrevenuesproducedbyindividualstatevoluntarydisclosureprogramsforresidentsandlocalbusinesses.Incomparison,thetwelveAirbnbagreementsproducedexactly$0inback-taxpayments.WhileotherAirbnbagreementsremainsecret,thelikelihoodthoseagreementsproducedmaterialback-taxpaymentsislowgivenAirbnb'snegotiatingposture.TheprospectsoffuturerevenuesfromAirbnbagreementsneedstobediscountedbythefactthat,asdiscussedinSectionE,statesandlocalitiesincreasinglyhavethemeansavailableforcollectingtaxesononlinelodgingrentals.StatesshouldbemindfulthattermstheyagreetoforAirbnbagreementscouldunderminesettledpracticesforvoluntarydisclosureagreementsandplaceatriskthesubstantialrevenuesgainedfromtheirvoluntarydisclosureprograms.Becauseoftheirexpandeduse,stateshaveadoptedformalprocedures,rulesandevenlawstogovernandguidevoluntarydisclosureprograms.Theobjectivesofthelegalframeworkfortheseagreementsistoensure(a)theintegrityoftheagreementprocessand(b)equitabletreatmentoftaxpayersinsimilarcircumstances.Thedevelopmentoftheselawsandruleshaveprovidedopportunitiesforpublicinputintothepoliciesgoverningtheseagreements.IndividualstatesandtheMTCmakesubstantialeffortstoensurethereispublicknowledgeofvoluntarydisclosureagreementsandthestandardtermsgenerallyoffered.Voluntarydisclosureagreementsarewell-groundedinlawandadministrativepracticeandareequitableandeffective.Statevoluntarydisclosureprogramsstrikeabalanceinofferingpreviouslynon-complianttaxpayerssomelimited,carefullycircumscribedrelieffrompenaltiesandsomeback-tax7CompiledfromMultistateTaxCommissionAnnualReportsforapplicableperiods.8Futurerevenueswerecalculatedatone-thirdofbacktaxpaymentsreceivedeachyearextendedoverremainingfutureperiodsinthedecade.ContinuingrevenuesintheFY2006-15periodfromMTCagreementssignedinyearspriortoFY2006wereexcluded,makingtheestimatemoreconservative.InterestwasestimatedusingtheIRSlargecorporateunderpaymentrateof5%.

12payments - butnotsomuchastobeunfairtotaxpayerswhohavelongbeencompliantwiththelaws.Thevoluntarydisclosureprogramsarecarefullydesignedtonotofferrelieffromthepainofback-taxpaymentstothedegreethatmakesnon-complianceamoreattractivechoicethancompliance.Thus,voluntarydisclosureprogramssupportequitablecompliancewiththelaw.Akeyelementofavoluntarydisclosureagreementisthetaxpayer'sdisclosureoffactspreviouslyunknowntothetaxagency,whichissensitiveinformationcontrarytothetaxpayer'sinterests.Thesefacts(a)establishwhythetaxpayershouldlikelyhavebeenfilingandpayingtaxesforpriortaxperiodsand(b)certifythattaxpayerhasnotpreviouslybeencontactedbytaxingauthoritiesandis,thus,comingforwardvoluntarily.Importantly,thisrepresentationoffactsissubjecttoauditandverificationbythetaxagencyand,ifitismateriallyinaccurate,thetaxagencycanwithdrawthebenefitsoftheagreementandimposethepenaltiesandassessmentsforegoneunderitsterms.Havinganaccurateandcompletedisclosureoffactssubjecttoverificationisessentialforataxagencytodeterminethepropertreatmentofthetaxpayer.Further,whilethisinitialdisclosureoffactsisheldconfidentialbythetaxagencytofacilitatetheagreement,futureinformationfiledbythetaxpayerintaxreturns,includingthetaxpayer'sidentity,willbesubjecttosharingwithotherpublicagenciespursuanttolawsandinformationexchangeagreements.Inshort,beyondtheinitialagreement,thetaxpayergainsnocontinuingsecrecyfromotheragencies.Thetypicalvoluntarydisclosureagreementrequiresthetaxpayertoregister,fileandpaytaxesforaprior"look-back"period(typicallythreeyears)andallfutureyearssubjectfullytothetaxlaws,rulesandproceduresofthejurisdiction.Importantly,theagreementpreservestheauthorityofthetaxagencytoconductaproper,independentauditofthetaxpayer'sbooksandrecordsforthe"look-back"periodandfutureyears.Yearspriortothe"look-back"periodcanbesubjecttoauditifthetaxpayer'sdisclosureoffactswasnottrueorcomplete.Statesapplytougherrequirementsinsometypesofcases.Whentaxpayershavecollectedbutnotremittedemployerwithholdingtaxesorsales/usetaxes,stateswillgenerallyrequirethetaxpayertopayallthecollectedbutunremittedtax - pluspenalties - foraslongatimeasthefailuretopayoccurred.Thesefunds,oncecollectedfromemployeesandcustomers,areheldintrustforthestateanddonotbelongtothetaxpayer.Finally,exceptforpass-throughentitytaxpayers,voluntarydisclosureagreementsdonotprovideanydirectbenefitstopartiesotherthantheirsignatories.Forpass-throughentities,manystateswillrequireonlytheentitytoenterandsignthevoluntarydisclosureagreement,andnotitsowners.Fortheirportionofthetaxliabilityofthepass-through,theownersshareinthecostsandbenefitsoftheentityenteringadisclosureagreement.Thisexceptionislimitedtotheuniquestructureandcomplexityofpass-throughbusinesses.Thekeyelementsofcurrentpracticesregardingvoluntarydisclosureagreementsaresummarizedasfollows:• Theyareoftengroundedinaformallegalframeworktoensureintegrityandequity.• Thepublichasknowledgeofandaccesstovoluntarydisclosureprograms.

13• Theessentialelementforthetaxpayertosecureanagreementisadisclosureoffactsunpromptedbyanyagencycontactsandthatremainssubjecttoverificationbythetaxagency - thusensuringitscompletenessandaccuracy.• Ifthedisclosureismateriallyinaccurate,thetaxagencycancanceltheagreementandreclaimorcancelitsbenefitstothetaxpayer.• Thedisclosureoffactsisprotectedfromsharingwithotheragenciesiftheyareaccurate,buttherearenolimitsonsharingthetaxpayer'sfuturetaxreturnandauditinformationwithotheragencies.• Thetaxpayercommitstotimely,futuretaxpayments.• Thetaxpayercommitstoback-taxpaymentswithinterestfora"look-back"periodoftypicallythreeyears,withapotentiallylongerperiodpluspenaltiesapplyingtocollected,butunremittedtaxesheldintrustforthestate.• Thetaxpayerisfullyaccountabletothetaxagency,whichretainsitsnormalsupervisoryandenforcementauthority,auditandotheradministrativetools.• Withapossibleexceptionforpass-throughentityowners,nopartiesbenefitfromvoluntarydisclosureagreementotherthanthesignatoriesthemselves.4. AirbnbAgreementsa. IntroductiontoAgreementsandTheirProvisions.ThissubsectiondescribesprovisionsoftwelvedifferentagreementsbetweenAirbnbandstateorlocaltaxagencies.Statesandlocalitieshavereleasedtheseagreementsundervariouscircumstances.Someagreementsareinthepublicdomainbecauseofstatepublicmeetinglaws.Taxagencydecisionsoropenrecordsrequestsaccountforothersbeingreleased.TheagreementsarebetweenAirbnbandthefollowingjurisdictionsbystatelistedinTable1.Table1.AirbnbAgreementsbyState - ListedAlphabeticallyStateAgreementEffectiveDateCaliforniaHumboldtCountyJuly1,2016CityofPalmDesertJuly1,2016CityofSanJoseFebruary1,2015FloridaFloridaDept.ofRevenue - State&22CountiesDecember1,2015HillsboroughCountyFebruary1,2017PinellasCountyDecember1,2015PolkCountyFebruary1,2017MarylandMontgomeryCountyJuly1,2016NewMexicoCityofSantaFeAugust1,2016CityofTaosAugust1,2016OregonMultnomahCounty(exceptCityofPortland)July1,2014WashingtonCountyJuly1,2016

14Collectively,thesedocumentsrepresentasampleofthelargernumberofagreementsAirbnbclaimstohaveexecutedwithstatesandlocalities - agreementsrunningto200perrecentAirbnbstatementsmadetotheFinancialTimes.9Table2onpage16displaysproblematicprovisionsintheAirbnbagreementsincategoriesbyjurisdiction.Theseprovisionstypicallydepartfromandextendwellbeyondestablishedtaxpractices.Theyareconsideredproblematicbecausetheprovisionsweakenaccountabilityfortaxpayments,createtaxinequities,shieldlodgingactivitiesfromregulations,orgenerateconfusion.Thefourcategoriesaretaxadministrationbenefits,back-taxamnesty,confidentialityandinformationbenefits,andmiscellaneous.Themiscellaneouscategoryisnotusedforsubstantiveevaluationpurposes.Itisincludedtonotetheironythatalthoughalltheagreementsprovidebenefitstothirdparties - Airbnb'slodgingoperatorsandoccupants - tenoftheseagreementsincludemisleadinglanguageclaimingtherearenosuchthird-partybeneficiaries.Thepresenceofaprovisionintheagreementforajurisdictionisindicatedbyacolor-highlightedcellwithacharacterinside.Adifferentcolorfamilyisusedforeachcategory.Withineachcategory,therearethreelevelsofshading.Thedarkestcolorwiththeuppercase"X"indicatesthattheprovisionisastrongformofthelanguage.Theseconddarkestcolorwiththelowercase"x"indicatesalesserversionoftheprovision,butstillonethathasasignificantimpact.Thelightestcolorindicatesthepresenceofaprovisionthatisambiguousorhasaminorimpact.Intermsoffrequencyofprovisions,thoseinvolvingtaxadministrationaremostoftenpresentintheagreements.Incompleteand/orinaccuraterecitalsandrequiringauditstouseanonymousdataareinalltheagreements.BlockingauditoraccesstoAirbnb'sbooksandrecords,limitingauditsoflodgingoperatorsandoccupants,andexemptinglodgingoperatorsfromregistrationarethenextmostfrequentprovisions.Back-taxamnestyprovisionsareincluded58%ofthetime.Confidentialityandinformationbenefitsareincluded40%ofthetime.ToanalyzetherelativedegreetowhichjurisdictionsprovidebenefitstoAirbnbanditslodgingoperatorsandoccupants,weclassifythembythenumberofcategoriesforwhicheachjurisdictionprovidesbenefits.Theclassificationisindicatedbythenumberintheyellow-highlightedrowatthebottomofthetable.Level1indicatesthejurisdictionprovidesbenefitsinoneofthecategories.Level2indicatesthejurisdictionprovidesbenefitsintwocategories,andlevel3denotesbenefitsprovidedinallcategories.Thehigherthenumber,theworsetheagreement'simpactonthepublicinterest.Thereareafewjudgmentsinvolvedintheclassification.PalmDesertisgroupedinLevel1jurisdictionseventhoughitoffersaminorprovisioninasecondcategory.MultnomahCountyprovidesbenefitsinthreecategories.However,itsback-taxamnestyprovisionisofmediumimpact,itstaxadministrativebenefitsarelessfavorabletoAirbnbthanotheragreements,anditdoesnotcompromiseinformationexchange.ThesefactorsresultinclassifyingMultnomahinLevel2.9LeslieHook,"Airbnblookstosecure700taxdealswithcities."

15Fouritemsspreadacrossvariousagreementswarrantcomment.First,therowlabeled,"DefinestheTaxBase,"referstotaxbaseinterpretationsandcalculationproceduresincludedintheFloridaandMultnomahagreements.Theirpresenceisnotedbecausetheyareexamplesofprovisionsthatconstituterulesthatshouldbeproposedthroughrule-makingprocesses.Second,the"asterisk"forauditlimitsforlodgingoperatorsandoccupantsforHillsboroughCountyisthenetresultof(a)languagerestrictingauditsforoperatorsandoccupantsasinotheragreementscounter-balancedby(b)addedlanguageintheagreementthatcountyofficialsbelievegivethemauthoritytoauditoperatorsandoccupantswhenwarranted.Third,threeoftheagreements - Florida,SantaFeandMultnomah - requiretaxofficialstoreceivewrittenconsentfromAirbnbbeforetalkingtothemediaaboutitsagreementswithAirbnb.ThisprovisionbreaksthechainofcommandspecifiedbylawthatrunsfromtheagencythroughelectedofficialstothepublicandhandssupervisionoftheagencyovertoAirbnbformediainquiriesabouttheagreement.Fourth,inPinellasCounty,theagreementrequiresthetaxagencytogivenoticetoAirbnbthatanotherpublicagencyhasrequestedinformationaboutAirbnboritslodgingoperators.Ifthetaxagencyprovidesthatnotice,itmayalertAirbnbanditslodgingoperatorstoapendinginvestigationorreviewbyaregulatoryagency.Thatnoticecouldunderminetheregulatoryagency'sefforts.Itseemsquestionablefortaxofficialstoinformaprivatebusinessofinvestigationsbyaseparatepublicagencythatmayaffectthatbusinessoritscustomers

17Thesubsectionsbelowevaluatetheseagreementscollectivelyasacompositeofprovisions,whichessentiallymeanslookingatascenarioof"maximumimpact."ThatisthenecessaryandreasonableresultofwantingtoconsiderallthemajorfeaturesthatappearinanyoftheAirbnbagreements.Thecompositeviewisalsojustifiedandrealisticbecausethreeofthetwelveagreementssubstantiallyconformtothe"maximumimpactscenario"andrepresentalltheissuesraisedbytheagreements.b. PerplexingStructureandScopeofAgreements.TheAirbnbagreementshaveaperplexingandlikelyunprecedentedstructureinwhichAirbnbbargainsforandsecuresextensivemonetary,proceduralandregulatorybenefitsforitscustomers - lodgingoperatorsandoccupants - whodonotsigntheagreements.Manyofthesebenefitshidetheidentityofoperatorsfromregulatoryandlawenforcementagencies.Nonetheless,thelodgingoperatorsandoccupantscommitnolegally-bindingperformancetothetaxagencyandarenotevenknowntotheagency.Wehavenotedalimitedinstanceofanon-signatoryimpactinvoluntarydisclosureagreementsforpass-throughentities.Thatexceptionarisesfromownershiprelationshipsdefinedbystatutorylaw,includinglawsonpass-throughtaxation.Thesubstanceinvolvedinthisexceptionisnarrowandinvolvesdistributingthetaxeffectonapass-throughentityamongtheownersofthebusiness.Nonewburdenorbenefitiscreatedintotalsumfortheownersbeyondtheburdenandbenefitsecuredbythepass-throughentityitself.Incontrast,theredoesnotappeartobeaclearbasisinlawforincludingAirbnb'scustomers - locallodgingoperatorsandoccupants - inataxagreementsignedonlybyAirbnb.Thereisnospecificlegalauthoritycitedintheseagreementsforthetaxagenciestostructureanagreementthatprovidesmajorbenefitstonon-signatory,localbusinesses.ThescopeofthebenefitsforAirbnbcustomersrangebeyondthebenefitsprovidedAirbnbintheagreements.Thecustomerbenefitsarenotgovernedbyprovisionsoflawand,infact,oftenconstituteexceptionstoorexemptionsfromthelaw.Theexceptionstolawbeginwithsuspendingregistrationfortaxpurposesoftheselocallodgingoperators.Publicregistrationisacenturies-oldmethodfundamentaltoadministeringtaxes,regulationsandotherlaws.ThebenefitsforAirbnb'scustomersgrowfromthereandsignificantlyshieldAirbnb'slodgingfacilitiesfromregulatoryandlawenforcementauthorities.ThestructureandscopeoftheAirbnbagreementsraiseamultitudeofquestionsthatshouldbethesubjectofvigorouspolicyandlegaldebate.Twoquestionsthatarisealmostimmediatelythatshouldgivetaxagenciespauseabouttheseagreementsarethefollowing:• Isitproperforataxagencytograntexclusive,wide-rangingbenefitstolocalbusinessesinagreementsthatthosebusinessesdonotsignandtowhichtheyarenotlegallybound?And,• Isitalsoproperforataxagencytoenteragreementsthatweaken,withrespecttotheselocalbusinesses,theimplementationoflawsadministeredbyotheragencies?SpecialNoteonTable3:TheremainingsubsectionsbelowcompareindetailspecificfeaturesoftheAirbnbandvoluntarydisclosureagreements.AusefulreferenceforthatdiscussionisTable3below,whichsummarizeskeydifferencesamongtheagreements.

18Table3.ComparisonofTaxpayerResponsibilitiesandBenefitsforVoluntaryDisclosureAgreementsandAirbnbAgreementsDescriptionTaxpayersinVoluntaryDisclosureAgreementsAirbnbinAirbnbAgreementsOperatorsandoccupantsinAirbnbAgreementsTaxabilityFactsConstitutionalNexusTaxpayersareprobablyorclearlysubjecttostate'sjurisdiction.Taxpayerishighlylikelyorclearlysubjecttostate'sjurisdiction.Taxpayerisclearlysubjecttostate'sjurisdiction.StatutoryApplicabilityTaxlawsforwhichthedisclosureismadeapplytothetaxpayer.Lodgingtaxlawsmayormaynotapply;legislationcanremedytheissue.Lodgingtaxlawsapplytotaxpayer - collectionrequiredabovethresholds.TaxabilityConclusion:Taxpayersareequalornearlyequalintheirtaxabilitystatusonconstitutionalgrounds.WherestatutesdonotapplytoAirbnb,thosestatutescanbeupdatedtoapply.Thereisastrongcasefortaxagenciestotreatthesetaxpayerssimilarly.TaxpayerResponsibilitiesFactualRepresentationsMustmakeacompleteandaccuratedisclosureoffacts,subjecttoverification.Makesrecitalsoftheirowndetermination;notrequiredtobecompleteandaccurate;notsubjecttoverification.Taxpayerdoesnotreciteordisclosefactsofanykindintheagreements.Back-TaxPaymentswithAgreements(Seerelatedfeatureof"Back-Tax"ForgivenessinTaxBenefitssectionbelow.)Taxpayerstypicallypaythreeyearsofpriortaxesplusinterest.Penaltiesforgiven.Harshertreatmentmayapplyfortaxescollectedbutunremitted.NoagreementrequiresAirbnbtomakeback-taxpayments.Noagreementrequireslodgingoperatorsoroccupantstomakeback-taxpayments.FutureTaxComplianceTaxpayermustregisterfor,timelyfileandpayfuturetaxes,subjecttofullauditaccountabilitytothestate.Taxpayermustregister,fileandmakefuturepayments,onfavorabletermsthatdonotrequirefullaccountability.Taxpayersexemptfromregistering,filingandpayingtaxesonAirbnbbookings,butrequiredfornon-Airbnbrentals.LegalCommitmenttoAgreementSignstheagreementandmustabidebyitsterms.Signstheagreementandmustabidebyitsterms.Doesnotsigntheagreement,butreceivesbenefitsfromit.TaxpayerResponsibilitiesConclusion:TheresponsibilitiesbornebythetaxpayerenteringavoluntarydisclosureagreementarehugeincomparisontoresponsibilitiesbornebyoperatorsandoccupantsundertheAirbnbagreements,eventhoughtheirtaxpayercircumstancesareequal.Inaddition,thevoluntarydisclosuretaxpayerbearsresponsibilitiesthataremoreextensivethanAirbnbbearseventhoughtheirconstitutionalcircumstancesaresimilar.TaxpayerBenefitsBack-TaxForgivenessIncaseswheretaxpayerwasanon-filerandhadnexuspriortothelastthreeyears,taxpayerbenefitsfromtaxforgivenessforperiodspriortolastthreeyears.Example:Ifataxpayerhadnexusforfiveyears,theearliesttwoyearsareforgiven - buttaxesandinterestarepaidforthemostrecentthreeyears.Infiveagreements,Airbnbreceivesamnestyforbacktaxes,interest,orpenalties.Mostoftheotheragreementsaresilentonback-taxliabilitiesforAirbnb,andnonerequireback-taxpayments.Insevenagreements,operatorsandoccupantsreceiveamnestyforbacktaxes,interest,orpenaltiesonAirbnbbookingsonly.Fivesplitbetweenthoseunclearaboutoperators'back-taxliabilitiesforAirbnbbookingsandthosepreservingrightstothem.Noback-taxpaymentsarerequired.

19TaxpayerBenefits - ContinuedFutureFilingExemptionNo.No.Yes,forAirbnbtransactionsinallbutoneagreement.Secrecyallowsavoidanceofregisteringforothertransactions.LimitsonorExemptionsfromAudits.No.Fullaccountabilityunderauditsapplies.Yes.Auditsalwayslimitedtoanonymousdata;nearlyalwayslimitedtoreturnsandsupportingdocumentsforthereturns;someagreementslimitperiodsofauditsandassessments.MostagreementsexemptoperatorsandoccupantsfromauditsfortransactionscompletedthroughtheAirbnbplatformforperiodstheagreementiseffective.ConfidentialityofAgreement.Yes,duetoconfidentialandproprietaryinformation,includinginformationcontrarytothetaxpayer'sinterests.Yes,manyagreementsincludeconfidentialityclausedespitenoconfidentialorproprietaryinformationbeingpresent.Yes,manyagreementsincludeconfidentialityclausedespitenoconfidentialorproprietaryinformationbeingpresent.Confidentialityofnegotiations.YesYes.Yes,despiteoperatorsnotbeingagreementparties.LimitsonInformationExchange.Onlyinitialdisclosureoffactsandidentityisexemptfromexchangewithotherpublicagencies.Allfuturetaxandidentityinformationsubjecttoexchange.Fiveagreementslimitorexemptinformationgeneratedundertheagreementfromexchangewithotherpublicagencies,unlessrequiredbylaw.Fiveagreementslimitorexemptinformationgeneratedundertheagreementfromexchangewithotherpublicagencies,unlessrequiredbylaw.ConfidentialityofTaxInformationfromPublicDisclosureYes,totheextentconfidentialityisrequiredbylaw.Yes.Someagreementsprovidebroaderconfidentialitythanlaw.Yes.Someagreementsprovidebroaderconfidentialitythanlaw.TaxpayerBenefitsConclusion:Thebenefitsenjoyedoperatorsandoccupantsarehugecomparedtobenefitsreceivedbyvoluntarydisclosuretaxpayerseventhoughtheircircumstancesarethesame.Thestrictlytax-relatedprovisionsfavoroperatorsandoccupantsoverthevoluntarydisclosuretaxpayers,andthelong-termsecrecyshieldforoperatorsandoccupantsfromcompliancewitharangeoflawsisasubstantial,addedadvantage.ThetaxbenefitsenjoyedbyAirbnbaresignificantascomparedtothebenefitsreceivedbyvoluntarydisclosuretaxpayersintermsofback-taxtreatment.Airbnb'staxbenefitsareevenmoreextensiveifAirbnbtakesadvantageoftheirabilityundertheagreementstounderreportandunderpaytaxes.Finally,Airbnb'sbenefitsarehugeintermsofarisingmarketshareinthelodgingindustryarisingfromsecrecyprovisionsthatshieldAirbnboperatorsandoccupantsfromcompliancewitharangeoflaws.OverallConclusion:Forbothburdensandbenefits,Airbnbanditsoperatorsandoccupantsreceivesubstantiallymorefavorabletreatmentthandosimilarlysituatedtaxpayersenteringtraditionalvoluntarydisclosureagreements.c. TheFactsNotEstablished - AFailureofBasicAdministrativePractice.TheAirbnbagreementsfailtoestablishcompleteandaccuratefactsaboutAirbnb,itslodgingoperators,andoccupantsnecessarytomakingproperdecisionsconcerningtheirtaxtreatment.Worseyet,taxagenciesrelinquishthepowertodeterminerelevant,truefactswhiletheagreementsareineffect.Indoingso,theseagenciesfail,toanextraordinarydegree,standardsofsoundadministrativepractice.Establishingfactsintaxcasesisacriticalfirststeptoensuringthatanagencyappliesthelawcorrectlyandequitably.Voluntarydisclosureagreementsdothatjobwell.TheAirbnbagreementsdonot.

20TheAirbnbagreementspresentAirbnb's"recitals,"astatementoffacts - butnotafulldisclosureofitsbusinessoperationsintherelevantjurisdiction.Unlikethetaxpayer'sdisclosuresinvoluntarydisclosureagreements,theserecitalsdonotappeartoincludeanyinformationcontrarytoAirbnb'sinterests.Nordotheyrevealproprietaryinformation,whichistypicallynecessarytounderstandthenatureandextentofacompany'sbusinesscontactswithastateorlocality.TherecitalssummarizelargelypublicinformationabouttheAirbnboperations,muchofwhichcanbegleanedfromtheirwebsite.Airbnb'srecitalsoftenincludeabriefoperationaldescriptionofpaymentprocessingthatappearstoconformtostandardpracticesforlodgingtransactions.Inothercases,therecitalsdescribewhatAirbnbdoesnotdoinajurisdictionorthelimitednatureoftheiractivitiesintermsofwhatAirbnb"only"does.HereareexamplesofsomemissingpiecesinAirbnbrecitalsrelevanttotaxagencydecisionsonissuesintheproposedagreements:• ThenumberofAirbnb'slodgingoperatorsandnumberofoccupant/nightsinthejurisdiction;• Informationaboutthenumberandscaleofoperatorscategorizedbytype(home-sharingvs.commercialstyleoperationsthatareseason-long,full-timeormulti-unitinnature),byamountofrentalrevenues,frequencyofrentalsandsizeoffacilities;• Airbnb'sengagementofcontractorswhoprovidephotographic,translationandotherservicesinvariousjurisdictions;10• ThefactthatAirbnbservesasanegotiatingagentonbehalfoflodgingoperatorsandoccupantstosecuremajorbenefitsontheirbehalfintheagreements,and11• TheidentityofthelodgingoperatorsAirbnbproposestoreceivebenefitsfromtheagreeementssotheagencycandetermineiftherearepriortaxviolations,delinquenciesorothercircumstancesthatwoulddisqualifytheoperatorsfromthosebenefits.Thetypesofissuestowhichtheinformationlistedaboveisrelevantinclude,butarenotlimitedto:• WhetherAirbnbanditsoperatorsqualifyforthefavorabletaxtreatmentsought;• Theamountofback-taxforgivenessandotherbenefitsbeinggrantedtoeach;• Theextentofpublichealthandsafety,housingandothercommunityissuesthatwouldbeaggravatedbymaintainingsecrecyofoperatorsandsuspendinginformationsharingwithotheragencies,and• TheimpactoftheagreementsontheabilityoftheagencytoensurepropercollectionoftaxesbyAirbnborthelodgingoperators.10Airbnb'swebsitereferencesservicesitprovidesthroughcontractors.OnereferencetoAirbnbcontractors,forexample,islocatedat:https://www.airbnb.com/help/article/414/should-i-expect-to-receive-a-tax-form-from-airbnb?topic=248.11Thebenefitstolodgingoperatorsinclude,amongothers,back-taxamnesty;exemptionsfromregisteringfor,reportingandpayingcurrenttaxes;immunityfromaudits,andsecrecyprovisionsthatpreventthetaxagencyandotherpublicagenciesfromknowingtheidentitiesoflodgingoperatorsandoccupants.Airbnb'snegotiatingroleforlodgingoperatorsisseparateanddistinctfromtheroleitdescribesinitsTermsofServicesofbeingabletoregisterandcollectlodgingtaxesdueontransactionsbookedthroughitswebsite.

21Thefactthatagenciesmayhavedisregardedtheseissuesinenteringtheseagreementsdoesnotlessentheneedfortheagreementstohaveacompleteandaccuratedisclosureoffacts.Tothecontrary,establishingthefullandtruefactsfirstisnecessarytoensurethatthetaxagencyconsciouslyconsidersallrelevantissues.TaxagenciesshouldnothavesoreadilyagreedtotheinadequateandsuperficialinformationthatAirbnbhasofferedinitsrecitalsoffact,butshouldhaveinsteadinsistedonfulldisclosuresofinformation.Theneedfortaxagenciestosecuretheidentitiesoflodgingoperatorsdeservescomment,consideringAirbnb'sfocusonkeepingtheinformationsecret.12Itisnecessaryandreasonablefortaxagenciestoknowoperatoridentitiesbecausetheyareconductingbusinesswithintheirjurisdictionsandmaybesubjecttovarioustaxes,includinglodgingtaxesiftheymeettheapplicablethresholds.Specifically,theagenciesneedtoknowoperatoridentitiesto:• Determineifthereareanycircumstancesinalodgingoperator'staxhistoryandstatusthatwoulddisqualifytheoperatorfromtaxbenefitsfromtheagreements;• Collectapplicablebacktaxesnotforgivenundertheagreementordueuponbreachoftheagreement;• Ensurethatoperatorsareincompliancewithrelevant,futuretaxobligations,13and• Maintainanadministrativeprocessthatenablescross-checkingAirbnb'staxreturnsandpaymentsagainstthelodgingoperators'records.Thelatteritemiscomparabletodualregistrationbywholesalersandretailersforsalestaxes,withwholesalersmakingsaleswithouttaxappliedthroughuseofasaleforresalecertificate.TheitemsoffactomittedfromAirbnb'sagreementsmaysimplybethetipoftheiceberg.Tosecurefullandtruefacts,taxagenciesshouldalsohaveinsistedthatAirbnb'srepresentationsbesubjecttoverificationbytheagency.TheagreementsdonotauthorizeagenciestocheckthefactsAirbnbpresents.Further,aswillbediscussedlaterinthisreport,theagreementseffectivelyblockagencyaccesstoAirbnbbooksandrecords - accessnecessarytocheckonthevalidityofthefacts.Further,iffoundmateriallyinaccurateorincomplete,Airbnband/oritslodgingoperatorsshouldbesubjecttoconsequences,suchaspaymentofbacktaxesandpenaltiesandcancellationofotheragreementbenefitsgrantedundertheagreement.Thus,theagreementsdonotrequireAirbnbtobeeitheraccurateorcompleteinitsstatementoffacts.Inexplicably,taxagenciessurrendertheirauthoritytosecurefullandtruefactsaboutAirbnboperations.Indoingso,theagenciescannotensuretheintegrityoftheagreementorequitabletreatmentofothertaxpayers.d. AccountabilityLost:AirbnbGainsControlofProcess - OperatorResponsibilityDisappears.TheagreementsrequireAirbnbtocommittocollectingandreportinglodgingtaxesonaprospectivebasisforfuturetaxperiods.However,unlikeallothertaxpayers,includingthoseenteringtraditionalvoluntarydisclosureagreements,Airbnbisnotrequiredtomeetregular12Contrarytoitsnegotiatingposture,Airbnb'stermsofservicespecificallyauthorizeAirbnbtodisclosetheidentitiesoflodgingoperatorsandoccupantsifAirbnbdecidestocollectlodgingtaxesonAirbnbbookingsinajurisdiction.13TheAirbnbagreementsprovidethatlodgingoperatorsareresponsibleforcollectingandpayingtaxes,forbackandfutureperiods,onnon-Airbnbtransactions.Withouttheidentityofthelodgingoperations,theseprovisionsareanemptypromise.Supplyingoperatoridentitiesisareasonablerequirementtoensureimplementationofthisagreementlanguage.

22standardsofaccountabilitytothetaxagencyfortheamountstheycollectfromlodgingoccupantsandthensubsequentlypay.TheagreementsdonotguaranteethatAirbnbwillreportandpaythecorrectamountsoftax,butinsteadallowitlatitudeindeterminingtheamountsitwillpay.Finally,theagreementslargelyrelievelodgingoperatorsthatmeetthethresholdsfortaxfilingoftheirlegalobligationtocollectandpaylodgingtaxes.Adisclaimerisinorderhere.Thissubsection,andothersthatappearelsewhere,discussprovisionsintheAirbnbagreementsorfeaturesofAirbnbproceduresthatwouldallowAirbnb,ifitchosetodoso,tounderreportorunderpaytaxesorotherwiseabusethetaxsystem.Discussingwhatispossibleundertheagreementsorcompanyproceduresdoesnotinanymannersuggest,implyorassertinanymannerthatAirbnbis,infact,underreportingorunderpayingtaxesorengaginginimproperorillegalactivitiesofanykind.Theanalysisconductedhereisaimedonlyatidentifyingthepotentialforproblemstooccur,butprovidesnoinsightintowhethertheproblemsareoccurring.TheunusualandunprecedentedprovisionsthatdiminishAirbnb'saccountabilityforthetaxestheyremitinclude:• TaxagenciesareallowedundertheagreementstoauditAirbnb'staxreturnsandsupportingdocuments(oftenqualifiedasdocuments"filed"withthetaxagency),butnotAirbnb'sbooksandrecords - effectivelyblockingauditorsfromverifyingtheaccuracyofitsreturnsandpayments.14• TaxagenciesarestrictlylimitedtoauditingonlyAirbnb-suppliedanonymoustransactiondatathatdonotidentifythelodgingoperatorsandtheirrentallocations,makingitpossibleforthedataandthetaxreturnstheygeneratetobefictional.• MosttaxagenciesarealsoeffectivelyprohibitedfromauditinglodgingoperatorsandoccupantsforAirbnbtransactionsduringtheperiodswhenAirbnbassumesresponsibilityforcollectionandpaymentofthelodgingtaxes - thusblockingtheuseofoperatororoccupantrecordstoverifytheaccuracyofAirbnb'sreturnsandpayments.TaxagenciesareessentiallyallowedtoconductauditsofsecondaryinformationAirbnbconstructs - taxreturns,supportingdocumentsandanonymousdata - andthatinformationmayormaynotbalancewiththeactualtransactionsandtaxesinthejurisdiction.WhethertheconstructedinformationrepresentsfactorfictioncouldbeonlybedeterminedbylookingatAirbnb'sfullbooksandrecords,andthatisblockedintheseagreements.Withpermissiontouseanonymousdataandtoprepareschedulesandreturnsbasedonthatdata,Airbnbhasgainedtheabilitytodeterminewhatitwillpayintaxes.Ithasessentiallywrestedcontrolofthetaxprocessfromtheagenciesandsecureditforitself.14Taxagenciesaretypicallyauthorizedbylawtoauditthebooksandrecordsoftaxpayerstodeterminetheaccuracyoftaxreturnsandpayments.TheAirbnbagreementsdonotreferenceauditsofAirbnb'sbooksandrecords,butinsteadbeingconducted"onthebasisofreturnsandsupportingdocumentation."IfanargumentismadethatthelanguagedoesnotliterallyprohibitaccesstoAirbnb'sbooksandrecords,therebuttalistwo-fold.First,ifthatisnotintent,whytheabsenceofthestandardreferencetoauditingbooksandrecords?Second,iftaxauditorsweretoaccessAirbnb'sbooksandrecords,theywouldlikelydiscovertheidentitiesoflodgingoperatorsrenderingmootAirbnb'sprovisionrequiringtaxagenciestoauditonlyanonymousdata.Theanonymousdataprovisionconfirmsthatconductingaudits"onthebasisofreturnsandsupportingdocumentation"isdesignedtopreventaccesstoAirbnb'sbooksandrecords.

24impropergainfromunderreporting.Theagreementsarealsosilentonwhogetstoselectthe12-monthperiod:Airbnb,thetaxagency,orbothconcurring.Thefractionalauditandassessmentlanguageinthesethreeagreementsmakesnosense.Afourthagreement(Polk)confirmsthisconclusion.Thatagreementalsoprovidesforauditsandassessmentslimitedto12monthsoutof36.However,itincludesadditionallanguagethatspecificallyallowstheagencytoprojectfromthe12-monthresultstoproduceanassessmentoverthefull36months,subjecttoAirbnb'sdiscretionarychoicetoallowthatextrapolationorrequiretheagencytoauditfortheadditionalmonths.Inotherwords,Airbnbcanchecktoseeiftheextrapolationortheactualauditwouldyieldalesserpaymentanddirectthefinalauditprocessbasedonthatcomparison.Theabsenceofthisextrapolationlanguagefromtheotherthreeagreementswouldappeartoconfirmthattheirassessmentsarelimitedtofractionaltimeperiods.Incontrast,taxpayersenteringvoluntarydisclosureagreementsremainsubjecttohavingtheirbooksandrecordsexaminedbytaxagencies.Theyaregrantednoexceptions,exemptionsorimmunityfromwhatthelawrequiresintermsofprospectivetaxreporting.Inshort,theyremainfullyaccountabletothetaxagencyfortheamountstquotesdbs_dbs14.pdfusesText_20