Help with collecting/remitting local taxes

[Jeff-And-Catherine0]

Airbnb just added new tools (for my area) so they will now collect all the applicable sales and lodging taxes for my listing.  I will still have to remit some of them myself but it was a real headache before this happened.  

If you are still in a situation where you will need to either ask guests for more in the form of a fee or just build it into your nightly charge here are some suggestions: 

1. Use the "community fee" option. In listing settings>Pricing>Standard Fees and Charges>Other standard fees, you can enter a percent or flat rate per booking. This fee is collected and included in your payout.   I suggest you add an explanation about that fee in your description somewhere so guests understand it is a tax you are required to pay.

2. Build into the listing rate the fee.  Adjust your rate to include the extra taxes. I suggest you tell guests the tax (maybe only some) is built into the fee.  This is tricky when you have to remit the local taxes because it won't show up on your transaction details.  To know the amount you collected for rent before tax this way, just divide the total (that is taxable) by the decimal form of the tax plus 1.  Example total cost is $100, local tax is 5%:  100/1.05 (100/1.05=95.24)   Subtract that number from your total to get the rent only amount. $100-$95.24=$4.76

[Jeff-And-Catherine0]

FYI we are from Colorado, not NY as this profile shows... weird!

[Christian2220]

Jeff,

Thanks for your directions.  I'm sure they'll help out some AirBnB hosts out there.

I wanted to point out that your alt. suggestion to bill tax under the "community fee" option is not available in Colorado and therefore probably not available in other states either.  

It's nice the AirBnB added new tools to help you be compliant with tax collection in your area, I wish they would do this with all areas.  For those areas that they refuse to then, at minimum, they should work with the hosts as we try to keep the local and state authorities off our backs.  

[Lisa723]

@Jeff-And-Catherine0 @Christian2220  I think whether the “community fee” is available may depend not on your location but on how many listings you have.

[Christian2220]

I think you may be right.  I'm researching this further and I stumbled across some information that said it's available to "professional hosts" or hosts that have 6 or more listings.  It said that "professional hosts" will have access to more tools where they can do this.  

As far as collecting and remitting taxes I just found a whole slew of information about AirBnB's tax collection policies.  I only found this by googling tax and AirBnB but, basically, there is detailed information for dozens of countries, states, and cities and the tax collection varies from location to location.  For example, they said that for Colorado AirBnB will collect the tax from the guest.

Additionally, I just got off the phone with AirBnB and the rep. told me that for Colorado AirBnB will collect the state and local tax and then turn it over to me with my sales proceeds.  It will then be my responsibility to remit the tax to the state and local authorities.  

Thus, it would behoove anybody to look further into this to find out how AirBnB handles the collection of tax in their area.

[Lisa723]

@Jeff-And-Catherine0 @Christian2220 Yes, and Airbnb is not the best source of information on that. They collect and remit my state tax, but not my county tax, which nobody at Airbnb seemed to know even exists. My CPA and the local tax authority were the only reliable source of information on this. I had been using the “community fee” to collect it, and just switched to the new tax option.

[Christian2220]

It's unfortunate that AirBnB is not better about the tax game; but, to be fair, it is not easy.  There are so many different tax rules, rates, and jurisdictions in every state, let alone every country.  I think they can definitely do a better job and hopefully they will.

I checked my live page this morning and they are showing tax on my page now and it is calculated at the correct rate.  Hopefully, they'll work with you to fix it so they'll collect your county tax too.