Airbnb Not Collecting Taxes

Krystle38 · ‎12-05-2023

Our airbnb is in Hawaii and the required tax to be collected is 17.99%. I added it last year and realized when doing taxes, we are short on the property tax money. I looked into it further and found out Airbnb is only collecting 15%. I tried to escalate the case and Airbnb support isn't helping the situation at all. They are supposed to refund the money they didn't obtain, but no one is helping the situation. I just keep going around in circles with them. Is there a way to speak to a manager? Has anyone experienced this and what was the outcome?

Lorna170 · ‎13-05-2023

@Krystle38 Do you know which jurisdictions are owed taxes? If AirBnB is collecting less in taxes than you expect, they may not have an agreement to collect and pay taxes to one of your required jurisdictions (typically the local municipality). If you can figure out how you are being short-changed, i.e., which tax authority is being ignored, you can add that tax percentage to your tax page.

Go to Menu, Listing, Pricing and availability, Taxes, choose edit and review what tax authorities are listed. Below that is a custom tax add-on for you to enter the missing authority. AirBnB will then collect that new amount in addition to what they collect from your guests. You will have to pay (report) these taxes yourself, but the money should be disbursed to you for that purpose.

Krystle38 · ‎14-05-2023

@Kia272 @Lorna170 I already added the custom tax last year for 17.99%, but for some reason, they aren't collecting the full amount. So the guest is underpaying by 3% and I have to make up the difference out of my pocket.

Has anyone experienced putting a custom amount (in my case 17.99%) and Airbnb collecting a different amount?

Dee-Dee12 · ‎13-07-2023

@Krystle38 Did you ever get this issue resolved? I'm also hosting a condo in Hawaii, and although I have the box checked to calculate the taxes based on the rate+cleaning fee (as required by state law), airbnb is not taxing the cleaning fee.

Kia272 · ‎13-05-2023

@Krystle38 How can they refund money they didn't obtain? That's very confusing and makes no sense. If they withheld 15%, and remitted the 15% to some tax authority, then there are no funds to give you, because they didn't withhold them. The other 2% is in your pocket. You can pay whichever tax authority didn't get paid directly if you choose to do so.

You got excellent advice and guidance from @Lorna170 which should help you get this fixed. Alternatively, you can just figure out if the 2% is on your gross or net, and pay directly to the taxing authority from your payouts in one chunk, or in whatever installments the taxing authority requires.

Lorna170 · ‎15-05-2023

@Krystle38 I ran a test booking on your property, and the taxes charged were CORRECT. You do not calculate taxes on the AirBnB service charge as you will NOT be paid that money and do not owe taxes on it.

Krystle38 · ‎19-05-2023

My past and upcoming reservation receipts aren't reflecting the 17.99% on the room rate and cleaning fee. I know that I'm not taxed on the service charge. I spoke to an Airbnb support specialist and they didn't understand why it's not collecting it either. This is incredibly frustrating 😞

Lorna170 · ‎20-05-2023

@Krystle38 Just one last question -- were these past and future reservations BOOKED prior to you entering the tax data on your listing? If so, that would be the reason that you are short on taxes for those bookings. Bookings do not get adjusted for any monetary changes that are made after they are of record.

Krystle38 · ‎24-05-2023

Sorry for the delay didn't see the notification. They were all booked AFTER adding the tax data.

Lorna170 · ‎24-05-2023

@Krystle38 Well, after thinking about your situation, I came to one conclusion. Perhaps instead of adding a single 17.99%, you may be able to add each of the various tax authorities and AirBnB may then charge the total percentage you are expecting.