Hotel tax collection

[Amy38]

Airbnb is about to begin collection taxes for my town...Nashville,TN.  This is great because I am tired of askind guests for the.

The catch is that they simply remit a lump sum to the Dept of Revenue with no breakdown of the rentals paying it....I forsee some real problems with the state.

I would like input from hosts in cities where Abnb has been collecting the tax.....any problems.

[Matthew285]

@Amy38 AirBnB has been collecting the Hotel Tax in San Francisco for a long time.

There hasn't been any problem to any of the hosts.

I imagine if the city government did not trust the accounting that AirBnB was providing, they would come down hard on AirBnB, not any of the individual hosts.

BTW, the fact that AirBnB is not providing a breakdown of the rentals was probably demanded by AirBnB.

[Rachael-And-John0]

Dear community,

I am being hit with a request by SF city business tax office to pay the 14% hotel tax on rentals from Q3 2018.l. This after all the news taht Airbnb was collecting this and submitting these taxes to the city. 

What do I do about this bill? The SF tax office seems unresponsive.

Thanks for your help.

[Farida2]

My county askes for a print out of my transaction page to be included with the taxes

[Jana79]

yes, I am super confused on the whole thing

[Amy38]

OMG! Nashville has two taxes..State Sales tax of 9.25% and a Hotel tax of 6% plus $2.50/night. Abnb just started collecting tax today...and they are just collecting the sales tax,...this will create confusion with the guest and take no burden off the host! Please, all or nothing. What are they thinking! If I have to collect and pay tax, it is preferable to hand the guest one bill and submit it myself.

[Sharon397]

agreed Amy. And we are sitting here trying to figure out how to have it built into our nightly rate so that we don't have to charge them another tax bill. Not the best as we like to use smart pricing. In order to add taxes into the nightly rate smart pricing I don't think will work and that means we'll look like we've just raised our prices significantly. So, from the guest side, what will they see in terms of taxes and billing? It will be a line item i suppose???  

[Amy38]

@Jana79 @Linda108 @Sharon397

Adding tax to my nightly rate would make me very expensive....also I would have to separate weird sums out for the IRS.

In my description, I mention the tax twice, so guests are not surprised by an extra fee...after all, every hotel everywhere tacks taxes onto the bill above and beyond the nightly room rate....so either people bring me a check or ( more recently), I send them a money request before arrival which is very easy for both of us.

I was delighted when Abnb announced they were going to collect tax, but now they are not helping at all...I still have to collect and file a second tax and guests are going to feel nickled and dimed to death.

My city council person is not happy with the lump sum thing so maybe this wont last. There is already massive cheating.

[Jana79]

Agreed!!! This has made it even worse!!! What should we do? I have always just sent my guest a request for money for the taxes after check in and it hasn’t been a problem... now it is a mess

[Linda108]

If you ever looked at your hotel bill, especially in a large city, you would see multiple entities adding taxes.  Air BNB sometimes contracts with one or so of these entities and collects and remits the tax in a lump sum to whatever entity has contracted with them.  By no means does this cover all your responsibilities.

I like the concept of these service but the execution is flawed. My City entered into a contract a couple of years ago and I was happy about that because I could lower my nightly rate and be more competitive.  Within a couple of months, the City realized that the lump sum was not acceptible for reasons of auditing and withdrew the contract.  Now I just add the tax to my nightly rate and include that in my description.

[Fred13]

I am sure Airbnb wished it wouldn't have been forced into the tax collecting scene by local municipalities, of which there are literally thousands upon thousands of different ones in a country like the U.S. Undoubtedly, many would want them to also do the accounting for them; one would think the 'Transaction History' should suffice. I bet Airbnb is 'thrilled' with the whole affair.

[Amy38]

@Fred13 As Abnb has all the taxes individually listed, their bookeeping is very simple, I am sure they are happy to collect the float on several million dollars a month.  And don’t forget, most people book and pay weeks or months before their trip.

by collecting only part of the tax, they have made things more awkward for the Tennesse host.

[Fred13]

Yes, that tax collection 'in part' is indeed the weird part in this particular case. However, I am sure the whole subject is one 'living, breathing' costly exercise for Airbnb. Taxes do continually change, so imagine the logistics to keep up with that.

There are also other ramifications, some host pay taxes, some do not, some include it in their price and some do not, and so on.

 Personally, I am a card-carrying member of the 'Careful what you wish for' fan club, specially when getting others to do what I could just as easily have done and maintain control.

[Russell76]

Yes, this is all very confusing.  The info for Nashville taxes on the Air BnB site isn’t outdated.  I spoke to the Metro revenue department and they told they are NOT collecting occupancy tax for Metro.  You have to pay that each month.  They are collecting Sales & Use tax starting March 2018.  

However, I noticed on some but not all transactions from March that there is in fact money taken from Air BnB for Occupancy Taxes.  So, where is that going if not to Metro?  Also,  why is it only for some transactions and not all?  

Whenever I ask any of the authorities what my tax responsibility is they say something like “well that is your responsibility to know”.  Well then who am I supposed to get that information from?  Air Bnb says basically the same thing.  A very clear cut list of what taxes I am responsible to pay would be nice. Very frustrating and confusing situation.

[Amy38]

@Russell76. It is confusing. It depends upon when the reservation was made...before or after March 1.

The taxes due are 9.25% sales tax payable to the state of TN. And 6% + $2.50/night hotel occupancy tax payable to Metro Gov. Collections.

Previously, the host collected and paid both taxes.

For reservations made after March1, Abnb is collecting the sales tax only.  The Nashville host still has to collect and submit the Metro hotel tax.

Right now the confusion issue is crossover reservations....those made before March 1....hosts still have to collect and submit all taxes.