Taxes can get complicated and Airbnb doesn't always collect and remit all the required taxes. They also sometimes collect the wrong amounts. Sometimes Hosts have to collect local taxes manually and then pay them to the tax jurisdiction. Sometimes Airbnb allows custom tax collection and sometimes they don't.
Alot depends on your legal address and whether you are in the Town of Keystone limits or in unincorporated Summit County. There is usually sales tax and lodging taxes that Airbnb lumps together under "Occupancy Tax" on the reservation detail. Don't assume the previous listing was collecting the correct tax amounts... they could have also been wrong too.
First you need to determine with each tax authority jurisdiction what taxes should be collected. The state sales tax is pretty straight forward at 2.9%. Looks like Summit County did have a 2% lodging tax, but not clear if the that has ended and whether the Town of Keystone has adopted that or not. There are also some other taxes it looks like:
This is what I found, but it may be outdated
You can see what tax jurisdictions Airbnb is collecting for (but not the percentages) on your listing. You'll still need to get the tax info from Keystone and Summit County. If you find out there is an error on the part of Airbnb, it is quite the battle to get them to correct it. The previous listing owners may also have an issue if the taxes were not collected and remitted on the old listing properly as well.
To see what tax jurisdictions Airbnb is collecting for (on both old and new listing), go to:
- Listing Editor
- Click Preferences Icon at top right
- Click Taxes
Occupancy Tax Collection - Colorado
https://www.airbnb.com/help/article/2298
Do you know the proper taxes that should be collected yet? Airbnb does not list the details/amounts, only the jurisdiction they are collecting for unfortunately. You can try contacting Airbnb to ask them what the percentages are, but I fear you'll have a tough time getting that information. What tax jurisdictions do they show for your listing? Can you post a screen shot here of what your listing is showing?
Custom Tax Collection is allowed by Airbnb in some states. Airbnb would collect the tax and you would be responsible for paying it to the tax authority (a pain). For example, custom taxes are allowed in Washington and Oregon, but not Texas. It all depends on what agreements Airbnb has with the taxing authorities. You must turn on Pro Tools to use Custom Taxes (if they are even allowed in Colorado) by going to your Account Settings and turning on Pro Tools.
In states where custom taxes are not allowed by Airbnb (like Texas), and addl local taxes are required but not collected and remitted by Airbnb; you only have 2 options:
1. Pay out of pocket whatever taxes are required that Airbnb doesn't collect and pay the tax authority yourself for each reservation.
2. Try and collect from the guest the local tax required via the resolution center and then pay the local tax authority (a pain).
You can also change from the Airbnb default tax collection to you as Host will receive ALL taxes (including the state taxes) and then you will have to pay the state and whatever local jurisdiction tax is required (a bigger pain!).
I suggest verifying with the local tax jurisdictions what the correct taxes are for STRs at your legal address. Then if it's incorrect, you'll have to work with Airbnb to correct the amounts they are collecting.
Aren't taxes fun 🙄
Hi Jocelyn... welcome to hosting in Colorado and Summit County! My wife Beth and I have been hosting near Breckenridge since 2016.
Because of the VERY COMPLICATED sales tax structures in Colorado... your issue is not uncommon. I've devoted a couple hundred hours over the years investigating the issue and helping hosts like yourself get resolution.
It appears that when you setup your listing, it was assigned the incorrect "TAID" (tax area ID). This happens A LOT and the host has no control over the assigned ID. Your unit is currently assigned the "TAID" for Dillon... and their OUTRAGEOUS 19.875% combined sales and lodging tax rate. See below:
Keystone's current combined sales tax rate is 6.375%... so your guests are getting gouged! Interestingly... I looked at the previous owners listing... and it also has the incorrect "TAID". It has the ID for "unincorporated" Summit County which is currently 8.375%. You can tell this by the "Summit County Lodging Tax" assigned.
You can get the issue addressed by calling the help center and asking them for a "TAID Override" and have them update it to Keystone, CO. More than likely they won't know what you are saying... so then you can try option 2. I have a contact with the Airbnb public policy team who I've been using to get these issues addressed. I will message you his contact information. Either option is going to take a month or two to get fixed.
BTW... did you know that private vacation rentals (STRs) are under EXTREME duress here in Colorado? When the state legislature meets beginning in January... we could have as many as 6 bills targeting us and our guests. Last year... we barely beat a bill and it's sponsor that sought to QUADRUPLE our property taxes. It's a VERY WORRISOME situation. I will share that information with you as well.
Best regards,
Rich
