New Hampshire room and meal tax

[Robin8]

Do any of my fellow NH AirBNB hosts know how the rooms and meals tax works?  

[Derek0]

Are you talking about providing meals and food to the guests? That can be considered tax deductible at 100% if offered in your listing as a benefit/service.  

Here are a list of other tax write-offs you can take:

http://www.sharedeconomycpa.com/blog/category/airbnb-taxes

[Suzanne75]

Derek, that is not what she is referring to.

NH requires anyone doing short term rentals to pay a meals and room tax monthly. I am just learning about this, but here is the link for everything you need to know if you are doing Airbnb in the state of NH:

http://revenue.nh.gov/faq/meals-rooms.htm#how

Thanks,

Suzanne

[Charles121]

Currently AirBnb does not collect the NH Meals and Room tax and therefor it is incumbent on the owner to collect this tax. However, AirBnb also does NOT allow any form of sales tax collection on its site by the owner. While an owner can add a fee for cleaning services or an additional guest, no other fees or options are allowed. The solution Airbnb states is... "If you determine that you need to collect tax, you can usually either add it within a Special Offer or ask your guests to pay it in person. In each case, it's important that guests are informed of the exact tax amount prior to booking. If you choose to collect tax outside of your listing's rates, please note that it should be collected only upon arrival and that we are unable to assist with collection." What does "usually" mean here, I'm not sure? It works sometimes....and what happens when it does not work? Sending a special offer for tax collection defeats the whole purpose of making an easy and transparent booking. And then what happens if the guests signs a rental agreement but does not leave the cash/check tax money? Civil litigation? I have a better solution(s). Either AirBnb needs to make special arrangements with every municipality in the country – if not the world or just allow the owner to collect the tax through a tax charge. HomeAway already does it seamlessly.

[Suzanne75]

I thoroughly agree, Charles, and just wrote Airbnb a long letter about it a couple of days ago. Everyone should write to them about this. If they are not collecting tax on your behalf, as they do in some states, they should at least allow owners to have it as a line item on the booking invoice. Instead, I am doing the incredibly cumbersome task of sending a booking alteration after each instant booking to add tax to the total. It forces every booking to be done twice, and adds money onto a total that the renters thought was final. To add insult to injury, Airbnb takes a percent of the tax as a fee for themselves, which is not only annoying, it is illegal. The more people that write to them about this the better. 

[Charles121]

Hey Suzzane I sent this to AirBnB this morning... AirBnB does not allow me to collect state mandated Meals and Rooms Tax or any other kind of tax. I own and host a house in Bretton Woods New Hampshire. Under New Hampshire State law I am now obligated to collect the 9% Meals & Rooms (M&R) tax for the NH Revenue Administration. If I don’t collect this tax I can be forced to pay the tax, penalized and put into other legal jeopardy. I do not have an issue with collecting this tax – it’s only fair to the other lodging establishments. However AirBnB does not give me the tools to collect that tax. AirBnb allows only two additional fees to be collected in the pricing menu, one for “Cleaning Services” and another for “Extra Guests”. Not even a “Dog fee” is allowed. But to not allow me to collect an occupancy tax which I’m legally obligated to do is an egregious error. The idea that a Host is required to send a “Special Offer” to collect a tax to every single inquiry not only destroys the user experience but is also deceptive. And I can’t realistically ask a host through a rental agreement to leave a check or cash for that tax amount. What would recourse would I have if a guest does not leave the required tax amount in check or cash…civil litigation? Ultimately, I would have to swallow the 9% tax myself – which is not acceptable. AirBnb currently collects occupancy taxes from other municipalities around the country – which require them to do so, I would ask AirBnb to make the same arrangement for New Hampshire hosts, and if that is not possible then give hosts the tools to collect these taxes on their own. If would be an easy software update to add an additional "sales tax" check box and "rate box" on the payment page. Then that tax line item could added in to the total amount page. It's done by HomeAway, why not AirBnB? Thank you for your consideration to this matter, Not sure if this will effect any change, but with enough people in NH complaining, AirBnB may be compelled to address this issue. Otherwise I'll be forced to remove my house from AirBnB and just list it on that "other" site.

[Suzanne75]

Thanks, Charles! Great letter, and similar to what I wrote. I encourage all NH hosts to write a similar letter.

[Bryan-and-Monica0]

Hi Charles,

I have been renting a room in our Dunbarton, NH home since the fall of 2015.  I was unaware of the M&R tax until recently. I read your posts here and really like what you and Suzanne have done to inform Airbnb of your dissatisfaction over their lack of an appropriate solution for this tax. Would you mind if I use your content (slightly modified of course) in my letter? Thanks!

[Bryan-and-Monica0]

Another thought...can't we just increase our retail rental cost to cover the tax? Do we need to inform the guest that 9% of the rental fee is going to the M&R tax? If not, it would be very easy just to pay the tax out of our revenue.

[Alyssa26]

Does the state of NH require you to have a Meals and Rentals License in order to host on AirBnb? I'm working on becoming a host but would hate to put myself in legal jeopardy by not having a license first. I have no issues collecting the 9% tax but do I need the license?

[Suzanne75]

Alyssa, please read the entire thread and you will have your answer. (In short; yes.)

Suzanne

[Scott222]

NH requires all short term renters to apply for a licence 30 days prior to renting, NH form CD-3, and then to file by the 15th of each month using form DP-14 or electronically.  Companies like Avalara make this process a little easier, and charge a $50 set up fee and $20/month to perform this process for you and pay the tax.  They send you an email each month, and you just have to enter your taxable income for that month.  

If the Dept of Rev finds you listing, they will request you to pay all taxes due on prior years.   The fee is 10% for failure to file and 5% for failure to pay, plus interest.  I sense they are searching the listing web sites and have actually heard there is a program they can use to scan these sites to see who offers rental in certain areas (they just did this in Newport, RI).  

AIRBNB needs to add this fee, I have read that other states are able to add this fee, althought that sounds innacurate, becuase I can't imagine AIRBN would add programing for just one state when all can benefit.  I list on other sites that allow the fee, and it is frustrating that AIRBNB doesn't, and have passed on the feedback to the site.  

[Ken-and-Donna0]

Did you ever hear back from Airbnb?  I have the same issue.  Thanks.

[Jan11]

Hi Suzanne, can you refer me to the information you found that shows Airbnb is taking a percentage of the rooms and meals tax for themselves? And the citing for how it is illegal? Thanks! I am getting ready to write my letter - since I am a NH superhost, maybe it will hold some sway. Airbnb is now collecting this tax for Vermont hosts, just one state away.  Would be good to know if NH is just not requiring them to withhold and pay the tax and if our state tax authority is where our letters should actually be going.

Also would be good to know if Airbnb is reading all of these community notes!

[David126]

AirBnB does not have a line item for tax, as it does not have for other items such as pet fees.

In some localities it has an agreement to pay some taxes, otherwise my presumption is that most people include it in their listing price.

Having AirBnb collect and remit some of the taxes can be a minus rather than a plus.