Portland Says Online Broker Dodges Taxes

PORTLAND, Ore. (CN) - Online rental broker HomeAway owes Portland, Ore. $2.5 million in taxes and fines, the city claims in court.

Portland is one of many cities that have tussled with Internet rental services such as HomeAway and Airbnb. It fined the Austin, Texas-based company more than $300,000 this year for not obtaining permits, safety inspections and ducking taxes.

Portland last year began collecting an 11.5 percent transient lodging tax from companies such as HomeAway, and required them to give the city the names and addresses of hosts.

On Wednesday, Portland sued HomeAway in Federal Court, seeking $2.5 million for tax violations. Also sued is HomeAway's collection service, VRBO.com.

"We offered to work with, and later repeatedly warned HomeAway.com about its obligations under Portland City Code," city tax director Thomas Lannom said in a statement. "We now find ourselves in the position of needing to take more forceful action."

HomeAway spokesman Matt Curtis said the company does not comment on pending litigation, but issued a statement nonetheless: "(O)ur goal in Portland, and all other municipalities for that matter, has always been to work collaboratively with lawmakers to introduce fair regulation that balances the needs of the community with the rights of property owners, residents and travelers."

Portland wants the collaboration and $2.5 million.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit