After months of heated legal battles, boycott campaigns, and political pressure, Airbnb has officially called it quits in its lawsuit against San Francisco. The short-term rental giant walked away empty-handed from its attempt to recoup $120 million in business taxes it claimed were overpaid to the city between 2019 and 2022.

The Board of Supervisors’ government audit and oversight committee voted to approve a settlement that requires zero dollars to change hands. Instead, Airbnb gets to move on, and San Francisco keeps every penny it collected.

Here’s what went down: Back in 2024, Airbnb filed suit arguing that the city had wrongly applied its gross receipts tax and Proposition C (the homelessness services tax) to the company’s operations. The company maintained it had overpaid by roughly $120 million over those years. The legal battle tied up a significant chunk of the city’s litigation fund, about two-thirds of that $120 million amount, money that could have been used for public services during a time when San Francisco was dealing with serious budget shortfalls.

The settlement represents a major win for the city and the labor groups that had fought hard against Airbnb. The SF Labor Council, which launched a boycott campaign calling out Airbnb’s “greedy tax avoidance,” celebrated the outcome. “This settlement means that our boycott was justified and we are very glad to see Airbnb finally paying their fair share,” said SF Labor Council Executive Director Kim Tavaglione. “Airbnb’s tax avoidance has been costing the city, but now this money is freed up to support essential services for San Franciscans”.

City Attorney David Chiu framed the result as a victory for everyday San Franciscans. “We are pleased to have reached an agreement that, above all, protects the public’s money,” Chiu stated. “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 tried to play it cool in their response, saying they were “pleased to reach an agreement” and claiming they’re “committed to ensuring San Francisco remains a great place to live and work”. But the reality is clear: the company couldn’t make its legal argument stick.

The majority of the $120 million will flow into the city’s general fund, which desperately needs it. The mayor, controller, and budget and legislative analyst are expected to release an updated five-year revenue and spending forecast on March 31, which will show how this settlement impacts San Francisco’s financial future.

This resolution signals that when workers and residents stand together against corporate tax avoidance, there can be real consequences. For a city struggling with housing affordability and homelessness, every dollar counts, and San Francisco just made sure Airbnb paid what it owed.