Airbnb Drops $120M Refund Lawsuit in San Francisco, Agrees to Zero-Dollar Settlement

Airbnb dropped its lawsuit seeking $120 million in refunds for taxes the city assessed on short-term rental income from 2019 through 2022, and the parties agreed to a zero-dollar settlement that will be submitted to the San Francisco Board of Supervisors for approval this month. The case had been scheduled to go to trial last month before the settlement was reached.

City Attorney David Chiu framed the outcome as a fiscal win for San Francisco, saying, "This settlement above all, protects the public’s money." Chiu added, "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."

Airbnb communications emphasized continued commitment to the city. Emilie Simons, an Airbnb spokesperson, said, "We are pleased to reach an agreement and we’re committed to ensuring San Francisco remains a great place to live and work." Another Airbnb spokesperson told the San Francisco Standard, "While we can’t comment on active litigation, Airbnb complies with its tax obligations. We’re committed to ensuring San Francisco remains a great place to live and work. That’s why we extended the lease for our global HQ in the City through 2037."

Alongside the zero-dollar figure, the settlement withdraws any claims either Airbnb or the city may have made about excessive or insufficient tax payments for 2023 and 2024, narrowing the dispute to the 2019–2022 assessment years. Scott Reiber, identified as chief tax attorney in City Attorney Chiu’s office, noted that the largest related claims against the city come from ride-hail companies.

Those related claims amplify why the outcome mattered for municipal finances. Uber is seeking $174 million and Lyft $100 million in refunds, a combined $274 million in claims reported by city officials, while another report has put similar claims by Uber, Lyft and other companies at more than $320 million. At the same time, the city is grappling with a two-year shortfall variously reported as almost $900 million and as $818 million, and Mayor Daniel Lurie has ordered elimination of at least 500 city jobs as part of budget actions.

Political pressure framed the dispute as much as the ledger did. Former House Speaker Nancy Pelosi pushed Mayor Lurie to press Airbnb to drop the suit, and the San Francisco Democratic Party voted to back a statement aimed at pressuring the company. Labor unions argued the lawsuit worsened the budget crunch, and Supervisor Matt Dorsey said, "Airbnb knows its largesse can force the hands of city leaders."

Airbnb’s decision to extend its global headquarters lease in San Francisco through 2037 was cited by the company as part of its ongoing ties to the city even as litigation proceeded. With the settlement filed for Board review this month, San Francisco officials will now decide whether the zero-dollar deal closes a high-profile legal chapter or leaves unresolved questions about tax treatment, corporate claims, and future litigation from Uber, Lyft, and other firms.