Airbnb Finds Success, but Struggles With Tax Questions

Watch the interview at 11:14 in the video above.

Since its launch in 2008, San Francisco-based Airbnb has turned the hotel industry on its head, making friends and foes along the way.

The online service allows individuals to rent out unoccupied living space to short-term lodgers. Accommodations can range from a single bedroom in Fargo, N.D., to a private castle in France. The company's popularity with its patrons has helped it grow to offer accommodations in nearly 200 countries.

But a recent report by the Boston University School of Management found that Airbnb has taken a bite out of revenue from traditional hotels. That can have major implications in cities where hotel taxes are an important source of revenue.

New York State Attorney General Eric T. Schneiderman has publicly battled with the company over what he sees as millions of dollars in lost hotel taxes. Over the past three years, the top 100 hosts in New York City have grossed more than $54 million, according to the New York Times.

Airbnb co-founder Brian Chesky told KQED Newsroom the company asks hosts to comply with local laws and regulations, but doesn't have to collect and remit taxes.

"The core problem here is there are laws for people and there are laws for businesses. When you look at the sharing economy, you look at Airbnb and you ask which bucket do they fit into? Sometimes they don't fit into either bucket," Chesky tsaid. "There's a third bucket. People as businesses."

Chesky added that Airbnb is looking to streamline the process for hosts, but would not say if that means the company plans to collect taxes the same way hotels do.