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Airbnb Sues Colorado Over $10.5 Million Tax Bill on Guest Fees

Customers booking accommodations through Airbnb pay two charges, a “Nightly Rental Charge,” which is paid to the property owner, and a “Guest Fee,” which is retained by Airbnb.  Airbnb recently sued the Colorado Department of Revenue (the “Department”) alleging that Colorado’s sales tax statutes do not authorize it to collect sales tax on the Guest Fee and that imposing a sales tax on the Guest Fee violates the federal Internet Tax Freedom Act.  This alert provides an overview of Airbnb’s claims and relevant factual, legal, and procedural background.

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