San Francisco Reaches $120M Tax Settlement with Airbnb

City and rental platform agree to zero-dollar deal, avoiding trial over tax dispute

Published on Mar. 6, 2026

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San Francisco and Airbnb have reached a settlement in their $120 million tax dispute, agreeing to a zero-dollar deal that resolves the rental platform's lawsuit seeking repayment of taxes assessed on its income from short-term property rentals in the city from 2019 to 2022. The settlement, which still requires approval from the Board of Supervisors, comes as San Francisco faces a projected two-year budget deficit of almost $900 million and plans to eliminate at least 500 city jobs.

Why it matters

The settlement with Airbnb represents a significant win for the city, which has been grappling with budget shortfalls and pressure to collect taxes from tech companies and gig economy platforms operating in San Francisco. The deal avoids a costly and potentially drawn-out legal battle, freeing up funds for essential city services as San Francisco confronts its fiscal challenges.

The details

Airbnb had filed a lawsuit two years ago seeking $120 million in refunds for taxes the city assessed on its gross income and other assessments from 2019 through 2022. The two sides were scheduled to go to trial last month before agreeing to the zero-dollar settlement. San Francisco also faces similar tax disputes with ride-hailing companies Uber and Lyft, who are seeking a combined $274 million in refunds.

  • In 2024, San Francisco voters approved Proposition M, which reduced taxes and fees for small businesses.
  • Last October, unions and city supervisors called for a public boycott of Airbnb over the company's tax demands.

The players

Airbnb

An online platform for short-term property rentals, with its headquarters located in San Francisco.

San Francisco

The city and county of San Francisco, which has been engaged in a tax dispute with Airbnb and other tech companies over their tax obligations.

Daniel Lurie

The mayor of San Francisco, who has ordered the elimination of at least 500 jobs in the city workforce due to the projected budget deficit.

David Chiu

The San Francisco City Attorney, whose office worked to defend the city's tax laws and ensure all taxpayers pay their fair share.

Emilie Simons

A spokesperson for Airbnb, who expressed the company's commitment to ensuring San Francisco remains a great place to live and work.

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What they’re saying

“Our office works tirelessly to defend San Francisco's tax laws and ensure all taxpayers pay their fair share. This settlement achieves both goals while putting this dispute behind us.”

— David Chiu, San Francisco City Attorney (San Francisco Chronicle)

“We are pleased to reach an agreement and we're committed to ensuring San Francisco remains a great place to live and work.”

— Emilie Simons, Airbnb Spokesperson (San Francisco Chronicle)

“This settlement means that our boycott was justified and we are very glad to see Airbnb finally paying their fair share.”

— Kim Tavaglione, Executive Director, San Francisco Labor Council (San Francisco Chronicle)

What’s next

The proposed settlement with Airbnb will be submitted to the San Francisco Board of Supervisors for approval later this month.

The takeaway

The Airbnb tax settlement represents a significant victory for San Francisco as it grapples with budget deficits and the need to ensure all businesses pay their fair share. The deal avoids a costly legal battle and frees up funds for essential city services, underscoring the importance of cities holding tech companies accountable and finding equitable solutions to complex tax disputes.