The room rental company says Schneiderman's request is too broad, and that complying with it will compromise users' privacy. “Governments and law enforcement agencies do not have an unfettered right to subpoena whatever data they want, whenever they want,” Airbnb says in its papers, filed in state court in Albany.
The company adds that Schneiderman “has not articulated even a minimal investigatory belief that any specific Airbnb host -- much less the majority of New York hosts -- has violated any law.”
Airbnb filed its court papers in response to a subpoena seeking detailed information about many New York residents who used the service to rent out apartments or houses to visitors since 2010. Among other information, Schneiderman asked for state residents' names and contact information, dates of guest stays, rates charged, and communications between the users and Airbnb about tax issues. Schneiderman is only seeking data about people who didn't remain in their homes when the renters were present -- but Airbnb points out in its court papers that it has no way of knowing whether or not homeowners were present during the visit.
Schneiderman's subpoena seems aimed at determining whether state residents who rent their places are paying the hotel tax. But whether users must do so is far from clear, according to Airbnb. The company says in its papers that many New York laws requiring tax collection don't apply to its users. For instance, one law regarding hotel taxes says that people who rent rooms in their residences “on a less-than-regular basis” need not collect sales tax on the rental.
“Airbnb users have no guidance from the relevant tax authorities or the NYAG as to when and how these taxes or exemptions apply to them,” the company states. The company also says that any tax-related discussions between itself and users are “confidential” and sensitive. What's more, Airbnb says that Schneiderman is attempting to do an end-run around the tax code, which prohibits him from obtaining certain records from the Tax Commissioner or Commissioner of Finance.
Of course, taxes might not be the only issue Schneiderman is investigating. He also could be examining whether New Yorkers are violating a 2010 law that prohibits people from renting out homes for less than 30 days. The law was passed in an effort to prohibit landlords from illegally converting residential buildings into hotels. (That short-term rental ban doesn't apply when users remain in the home with guests.)
Airbnb says in a blog post that it doesn't expect a ruling immediately, and that it hopes to work with Schneiderman's office while the case is pending in order “to make New York and the Airbnb community stronger.” Specifically, Airbnb says it wants to weed out any landlords who are illegally converting residences into hotels, and also work with the authorities to collect taxes. “We share the goal of fighting illegal hotel operators and slumlords who have never been part of our vision and have no place on Airbnb,” the company states. “That includes working with the city and state to collect taxes, weed out bad actors proactively, and help handle complaints from neighbors with a dedicated hotline.”