Texas occupancy tax

[Cathy151]

How is everyone handling Texas Occupancy taxes for local districts?  Airbnb collects only for the state of Texas.  But I have to collect for the town of Surfside Beach 4%.  If I rent the house for $100 per night, I owe the state of Texas $6 and city of Surfside $4.  Before Airbnb was collecting taxes, I charged $110 per night to include the taxes.  If I charge $104 per night ($100 rental plus $4 for taxes for the city of Surfside), then Airbnb charges 6% for the state of Texas on the whole $104.  Does anyone have a solution to this tax problem?

[Chelita0]

This is a problem.  Guests shouldn't be paying fees on the hotel occupancy tax they are being charged.  HOT tax should be separate.  In Galveston, local tax is 9%.  

[Janet165]

I just discovered that Airbnb only collects state tax and am now saddled with trying to figure out  how to collect the local taxes of 7% charged by Brewster County.  All I have found out is that it is extremely difficult to find contact information for AirBnb.  If anyone has any suggestions, please, please post here.  And if anyone knows how to contact this company, please share.  

Frustrated in the Big Bend region!  

[Flora32]

I am in the same boat, and no one with the Texas Comptroller, especially Airbnb, has a GOOD solution.  I was told today when I called to give feedback again that a claim would be filed with their tax office, but that there is no one I can actually speak with in that department. They did not simplify anything for hosts in Texas as they claimed this would.

[Karen769]

Hi Flora, I am in the same boat.  I just received a letter from the City of Fredericksburg stating that I am now going to be charged a HOT tax for local which I had no idea that I was supposed to be collecting for.  Airbnb has not solution only to try and collect it from the guest at the time of check-in and to put in my description listing that I will be doing so.  Now I find that sort of rude and bad practice to go back to my guests after the fact and ask for a 7% HOT tax.  Airbnb says "the guests should understand this right up front and should not have a problem with accepting the extra money to be charged to their credit card."   I am just beside myself to have to keep up with this extra added responsibility.   Any ideas on how to handle this? 

[Flora32]

Yes! I have a major problem with this and neither Airbnb or the Texas Comptroller seem to understand my complaints. I have to collect 7% local tax in Port Aransas. Originally, a $100 night would be listed as $113 (inlcuding 6% ST & 7%Lo).  So now, if I include my rate, guests (and Airbnb) see $107 - which Airbnb would charge tax on $107 and not the actual rate of $100.  Airbnb is charging too much tax that way.  It was suggested to me that I offer the Special Rate, in which I would have to alter the price every time to refelct the price with the local tax, negating instant bookings altogether.  This did not simplify anything for me as a host.  Plus no guest wants to receive a "special rate" going up in price!  On top of that, we still have to fill out quarterly reports, simply to report $0.  What to do?  Any ideas?

[Mary490]

From what I understand AirBnb collects the state tax of 6%, leaving local tax to be collected by the host as discussed in this thread. I spoke with airbnb and their collections from hosts are paid annually to the revenue service. This too leaves the host with a problem as filing is required quarterly or you face a penalty! A real headache actually.

Home Away collect the correct amount for both city and state and charge the guest at checkout when they book. The whole amount is paid to the host enabling the host to file quarterly and pay the correct amount.

AirBnB said they would have a person from their legal department contact me to discuss but I've heard nothing!

I cant even pay the equivalent amount of 6% airbnb collect and withhold as they wont pay it back to me at the end of the year!

I'll keep sending them messages ...to be continued!

[Tracy140]

Please post if you hear back.  This is a major problem and based on your feedback it might be eaiser to list on Homeaway.  I really want to use AirBnB but I don't want to pay tax penalties due to this administrative tax nightmare.

[Matthew347]

I was given the same speech from Airbnb, legal never called. I was also told their is an opt out that has to be done through legal as well. Airbnb is telling my costomers that ask that they collect the occupancy tax and no additional taxes are due. I've had booking cancle because of it. This is not a problem with other sites I use. this is a hugh cluster F$%K!

[Matthew347]

Heads Up, see my communication with Airbnb and Tax office.

Matthew:

I am astounded by the lack of integrity on the part of Air BnB and their staff. Air BnB has NEVER paid Galveston for hotel occupancy tax. They continue to use generic language like “local authority” which causes much of the confusion. I have many clients who have been misled by Air BnB’s communications.

Air BnB has an agreement with the state of Texas to collect and remit the 6% hotel occupancy tax but they do not have a similar agreement with the City of Galveston. The rate for Galveston’s hotel occupancy tax is 9% which was authorized by the state legislature over a decade ago.

Chapter 33 of the Galveston Tax Code defines the original 7% tax rate which was later amended to 9% because we built a convention center. I have attached the supporting documentation.

Please let me know if you need anything else from me at this time and let me know how the issue is resolved.

#LoveGalveston

1. Kay ****
   Certified Tourism Ambassador
   Staff Accountant
   

From: Matthew [Personal information hidden]
Sent: Wednesday, February 14, 2018 3:56 PM
To: response@airbnb.com; Kay ****
Subject: Re: Airbnb: Resolution Center [Personal information hidden]

Diogo,

I can't even believe were having this conversation. Not only is it the law that we collect this tax but like the state tax we have to pay then monthly or quarterly and you know this but I'm being ask to prove this? I must be talking to the wrong department. You might consider talking to your legal department, I will save all concordance between us for future use if an audit is done on my account. For your convenience I have attached the local ordinance and CC the accountant from Galveston County just in case there is some additional questions you may have as to weather this tax is owed and if Airbnb has been paying it on the owners behalf. I have also include a link so that you may do you own research as well.   http://www.galvestonparkboard.org/174/Hotel-Occupancy-Tax

One last thing, this transaction was done in US dollars, please forward a screen shot in US dollars. According to my records you collect only $15 dollars as occupancy tax, the occupancy tax in Galveston is 15% not 6%, 6% is the state portion only. If you really do collect the occupancy tax it should be about $37.54

Key,

I know we have talked about this issue before but apparently I need proof that such tax is due or that there is even a separate occupancy tax over what the state charges. Airbnb collect 6% as occupancy tax and forwards that amount according to them and sends it to the local Authority. Can you confirm what I already know. See below, I have other emails that state they collect the city tax on our behalf as well. Airbnb really needs to get their head straight over this issue or at least hire people that know what they are talking about.

Thanks,   Matthew [Personal information hidden]

On 2/14/2018 2:54 PM, response@airbnb.com wrote:

Airbnb Customer Experience Diogo L, Feb 14, 12:54 PST: Hi Matthew, Thanks very much for your answer, regarding the occupancy taxes as you can see in the screenshot attached, they are collected directly by our system. Therefore airbnb will send them to local authority. You don't need to collect them, but if you have a document from your local authority requesting these taxes , please forward it to me. Best Regards, Diogo www.airbnb.com/help Attachment(s) [Personal information hidden] THIS EMAIL IS A SERVICE FROM AIRBNB CUSTOMER EXPERIENCE.   This email is a service from Airbnb Customer Experience. For more information visit our Help Center

[937QRP-58VD]

**[Personal information has been hidden from this post for safety reasons]

[Chelita0]

Kay is correct.  I'm not sure why the State of Texas made a deal with AirBnB without taking the local Authorities.  This is confusing to guests and hosts and actually double taxes at the state level any amount remitted to local authorities.  An example: 

If a Galveston host charges $100, an additional $15 should be collected from guest; $100 goes to the host and $15 is remitted to proper taxing authorities - $9 to Galveston Park Board and $6 to the State. 

$115 collected from guest:

$100 nightly room fee to host

$9 tax to local taxing authority

$6 tax to  state authority

Most booking programs and AirBnB competitors provide the tools to accurately calculate tax by jurisdiction.  

However, in this same scenario for an AirBnB booking, AirBnB collects and  pays $6 to the state.  The host, then,  must separately pay $9 to the Park Board, reducing the host's  income by $9, and also effectively charging 6% on that $9.00.   

$106 collected from guest:

$100 to  host which includes a 9% local tax. 

$6 to State for 6% tax on the $100.

Effectively: 

$91 room fee to host

$  6 remitted to state by AirBnB

$  9 remitted to local taxing authority by host (9% of $100) 

In summary, the guest is paying 16.5% in tax (7.5% to state and 9% to local taxing jurisdiction) and the host receives 9% less because there is no way to separately list the 9% tax at booking!  

Alternatively, if the listing notifies the guest that the $100 includes local taxes as required by the state, then the local tax paid would be 9% of $91,  shorting the local taxing authority, while the state is still in the position of receiving tax on any tax paid to local.  

Hopefully, if this were pointed out to the Texas Comptroller, an adjustment would be made that would require AirBnB to remit ALL taxes to proper authorities as well as remit to local authorities the names of remitters, if not amount.  

It is also my understanding that by collecting the taxes in bulk, AirBnB is not required to provide the state with a list of who pays.  This places local jurisdiction in a position of having to expend man hours in tracking non-payers who may not understand their obligation  or just giving up on trying to collect resulting in a potential large tax base loss and inequitable treatment of hosts who diligently pay taxes!  

I have just read the AirBnB tax explanation and it is misleading, placing hosts at risk for not complying with the law.  

Chelita ****

[Vernon10]

Airbnb should add the occupancy tax button for Host to add the Bexar county 1.75% and city 9% occupancy tax. Airbnb got it wrong when the implemented the collection of State occupancy tax here in Texas last year. Airbnb started collecting state occupancy tax not the county and city.

The issue is that they just labeled it occupancy tax, Not “State Occupancy Tax”. So when we ask the guest to pay for county and city tax they think we are trying to rip them off. Even though we have it posted on the listing.

Airbnb answer to this is to send them a special offer to collect the tax. We have to turn off instant booking  to do this. We as host should not have to ask guest to pay after they already booked.

Airbnb needs to specify and label the radio button state occupancy tax that they are collecting form the guest and add 2 more tax radio button for the host to be able to put in the county and city occupancy tax. Let it get deposited into the bank and we the host can insure it is paid, it can even go into account that is setup just for the tax. this way we the host do not have to collect money from guest on check-in.

This should have been done for host a long time ago.
I have had guest cancel because of this. This is not hard to do, and can be setup per zip code when we add new listings and for existing listings.

I know other vacation rental sites offer this for their host… And Airbnb provides this for other cities in Cal, New York, why not Airbnb host in Texas and other states.

Maybe I missed it and they did add it when they just announced the swiping changes to Airbnb app web browser for all these new upgrades and add ons.

Any feedback would be helpful.

Thank you

[Mark829]

I also host in San Antonio, and it seams quite simple. Monthly I send the 10.75% of my gross earnings to the County/City of San Antonio, with the HOT form and AirBnB pays the state. It is not very complex and only takes 5 min a month.

[Letti0]

@Mark829 @Vernon10 I do the same pay the state for HA bookings only not AirBnB. Not a big issue for me either. We are looking to set up a meet up for San Antonio renters also, if interested respond to this thread: Meet Up San Antonio

[James284]

Do you notify your guests that a portion of their rent price is for taxes? Do you need to? Thanks a lot! I'm in the "pay local taxes" boat now too.