Airbnb Maine Lodging Tax Rate wrong in 2019?

[Martha183]

From Airbnb's Host Gross Earning reports Airbnb is charging more Maine State tax than authorized by Maine. This started in 2019.

The State of Maine's rates and rules didn't change. Something Airbnb is doing, or not doing, changed. What? Why is this so hard to get a straight answer out of Airbnb?

According to MAINE REVENUE SERVICES SALES, FUEL & SPECIAL TAX DIVISION INSTRUCTIONAL BULLETIN NO. 32, The State of Maine levies a 9% Occupancy Tax on short term Airbnb rentals. The 9% rate has not changed in several years.

Airbnb collects that tax and pays the State of Maine in bulk for all hosts in the state. Airbnb does not provide an individual accounting of this transaction. Nor do they, from my repeated Customer Service requests, understand basic math or their own rules!

In the Maine bulletin  it says, the tax applies to the price of lodging AND...

"... the amount billed for extra services that are a part of the rental of a room in a hotel, whether or not separately stated. Some examples of services that are considered a part of the rental of living quarters include ...pet fees, damage or cleaning fees... Service fees charged by property management firms are also subject to sales tax."

Airbnb produces a Host's report from "Transaction History" and the "Gross Earnings" menu selections.

For each rental it itemizes the Payout Amount, the Host Fee, the Cleaning Fee, the Gross Earnings and the Occupancy Taxes. The Gross Earnings are the sum of the the lodging and the Cleaning Fee (from this report it's calculated by the Payout Amount (Lodging+Cleaning-Host Fee) plus the Host Fee).

In 2017 and 2018 the occupancy taxes collected on this report were 9% of the reported Gross Earnings. This matches the State of Maine brochure as it is collected on the Lodging and the Cleaning Fees. In 2019 the Gross Earnings are apparently calculated the same but now the taxes reported are 10.23% of the reported Gross Earnings.

This means that either Airbnb is using the wrong rate or they are applying the 9% rate to something besides the Gross Earnings shown in their report.

1) Was Airbnb collecting taxes incorrectly in 2017-2018? Who owes an underpayment? Airbnb or the uninvolved Hosts?

2) Is Airbnb collecting too much tax in 2019? How much of that are they paying to the State of Maine?

3) Is their Gross Earning report wrong and the total taxes collected different than they report to the Hosts? They do charge service fees to the renters that seem to be taxable but don't show up on the Host reports.

Multiple emails back and forth with their "expert" resulted in boiler plate responses that can be summarized as: Yes we collect the correct taxes and pay them...trust us. The exact formula we use is dictated by agreements between us and the State of Maine...way too complicated to disclose.

I urge all Maine Hosts to compare their Gross earnings reports from 2018 and 2019 and see if this discrepancy is unique to only some Hosts or applied to everyone. Since Airbnb is unable or unwilling to explain the difference between 2018 and 2019, I'm sending this correspondence to the State of Maine as well. Maybe they can explain what Airbnb is doing.

[Emilia42]

@Martha183,

Guests are paying 9% on the total nightly rate + cleaning fee + service fee. You do not see the service fee that guests are charged and that is not included in your gross earnings. If you try to book your listing you can see that the total taxes are 9% of the total paid.

[Martha183]

Thanks...unlike Airbnb support, a host that understands math!

That makes sense but why was that so hard for Airbnb to provide?!

Since Airbnb has ignored my question I still want to know if this is...

a) A change in how they are doing the Host Gross Earnings report in 2019? In prior years the tax amount shown on that report was 9% of the nightly rate + cleaning fee.  The Guest Fee and any taxes on that were not shown. That was at least consistent. Now in 2019, the total tax amount may be correct but looking at this report alone, the tax amount is incorrect when applied to only the Host's portion of the earnings.

OR

b) Was Airbnb not correctly collecting taxes on the Guest Fee in prior years and fixed it in 2019.

Overall not getting a straight answer from Airbnb and being told multiple times..."it's correct because we say so" is completely unsatisfactory.

[Abbie29]

I have been struggling with this too.  Thank you for showing that the tax is actually based on the rental plus the service fee.  This is the first year that Airbnb is remitting occupancy taxes to the state for us.   How do we know the tax remittance is actually going to our account?

[Jacki12]

I cannot see any info on any reports that we had lodging tax collected by Airbnb. I am concerned we still owe it.

[Emilia42]

@Jacki12 In the state of Maine, Airbnb collects and remits lodging taxes on behalf of hosts. Hosts don't have access to the figures. It is all done on the guest's end.