My Name is Maria, I want to start a conversation with the Ai...
My Name is Maria, I want to start a conversation with the Airbnb community by sharing my knowledge and experiences as a dedic...
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Yes...the whole tax issue is getting to be quite the mess. More and more jurisdictions are realizing that many Airbnb Hosts (or any STR Hosts on other platforms) don't pay local/city/county taxes as required. Their solution is to establish an agreement that Airbnb collect the taxes for every listing in their jurisdiction on each reservation and pay them instead of the Hosts paying them individually. This is usually done through Airbnb's City Portal program. The problem is, Airbnb pays the local jurisdiction in one lump sum...that is part of the agreement. There are no records you can get from Airbnb that state, "we paid $XX.00 in taxes for Jane Doe's Airbnb Listing." They can't. It's all in one lump sum. Your local tax authority should be aware of that.
The only way to "prove" the taxes were paid is by showing them the earnings summary on the listing. Unfortunately, it will only show one heading for "Taxes", which includes ALL taxes including state occupancy taxes, sales tax, and local taxes. Many Hosts keep a spreadsheet for every reservation (and save a PDF version of every reservation by clicking print at the top of reservation details and saving it as a PDF). They then breakdown the taxes for every reservation on their spreadsheet so they know what taxes were paid and by who.
Here are the problems:
1. Airbnb and/or the local jurisdiction don't notify the Hosts in the jurisdictions of the arrangement.
2. Some Hosts continue to pay the tax directly to the jurisdiction, unaware that Airbnb is collecting it for them. Sometimes jurisdictions still require Hosts to file the excise tax form and state "-0- owed as Airbnb collects and pays.
3. Some jurisdictions continue to ask for an accounting of the amount Airbnb paid in behalf of the Host, not understanding that is not possible, as Airbnb pays in behalf of all Hosts in one lump sum. They should know this.
The only way to "prove" the taxes were paid is by showing them the earnings summary on the listing. Unfortunately, it will only show one heading for "Occupancy Taxes, which includes ALL taxes including state occupancy taxes, sales tax, and local taxes. Many Hosts keep a spreadsheet for every reservation (and save a PDF version of every reservation by clicking print at the top of reservation details and saving it as a PDF). They then breakdown the taxes for every reservation on their spreadsheet so they know what taxes were paid and by who.
I checked your listing and if you click price breakdown on a reservation, then click the underlined word taxes, you can see the jurisdictions they are collecting for on the reservation, but not the amounts. By doing the math, you can figure out if the taxes for all jurisdictions are being collected for correctly.
You can also turn on Pro Tools and go to the preferences icon.Then choose taxes, and you'll see there what jurisdictions Airbnb is collecting for. This is only visible on a desktop/laptop. Some Hosts get so frustrated they turn off the Default Collection and do ALL the tax collecting themselves. I don't advise that. Sometimes that is not even possible if there is an official agreement between Airbnb and the taxing authority for Airbnb to collect the tax and not the individual Host.
The only way you can calculate the actual amount collected for the local county is by creating the spreadsheet and breaking down the taxes as shown on each reservation from either the Earnings Summary or by looking at each reservation and calculating the separate tax amounts. You can also take the lump sum amount on the Earnings Summary and do the math for each type of tax and get a pretty good idea of the total paid to the local jurisdiction. However, as mentioned, it is not reported to the tax authority under your name, but Airbnb pays ALL the taxes in one lump sum to the county. There is no way to identify how much was paid to them just for you alone.
I have seen this note somewhere in a Help Article that Airbnb can share your information with a taxing authority, but I think that is only if the local authority requests it from Airbnb and only if certain agreements are in place (which Hosts don't know about):
Information We Share With Tax Authorities
https://www.airbnb.com/help/article/2523#section-heading-11-1
What a mess...🙄
Just a disclaimer here…I’m not a CPA, but I do provide consulting services to Hosts and help them with tax and regulatory issues with their listings. I’m not familiar with your state (VA), or your local county (Northampton), but I can provide you with the information I use to help Hosts I work with. You should verify the information below and ensure it is correct with your accountant. This is lengthy, so grab a cup of coffee 😊😊
First, I always recommend my Host clients print to PDF every reservation and keep on their computer and a backup copy on a flash drive (some also print out a copy; but keeping as a PDF saves some trees 😊). The reservation detail contains all the information you would need in a situation like this. I advise my clients to also keep a spreadsheet and record every reservation and break down the taxes on the spreadsheet for exactly the situation you are dealing with. Also, in the off chance your listing is suspended, or permanently deleted, you will still have all your reservation details to refer to. I provide an Excel template for them to use and keep track of each reservation. Additionally, Airbnb removes the guest phone number from the reservation details after the guest checks out, so keeping a PDF version of each reservation when the booking is made retains the guest phone number.
Airbnb will not breakdown the totals/percentages for you or the county. Your county should already know they won't get an individual statement to the total paid to them by Airbnb for you, as they only get a lump sum for ALL Hosts. One wonders why they weren’t advising you that Airbnb pays the transient occupancy tax in the first place and advising you they didn’t need you to pay this again? They may not go any further with a refund of the TOT paid since you can’t provide something from Airbnb. You’ll have to ask them if they will accept your breakdown as described below. If they won’t, you’ll have to absorb the tax yourself and possibly write that off as a business loss (check with your accountant). Airbnb makes it clear that Hosts are ultimately responsible to ensure taxes are collected and paid (in your case, overpaid) correctly.
You can ask the county if they will accept a printout of your earnings summary showing total taxes paid and the screen shot of the tax breakdown from your listing and/or an example reservation (choose one from your reservation details). You can do the math as noted above and determine if the numbers are correct. I would only show them the dates of the reservation and the price breakdown, I would not let them see the guest name or photo (redact it).
Here is what I’m seeing the taxes are for Virginia and Northampton:
Taxes for Each Reservation
State of Virginia Retail Sales & Use 5.3%
Northampton Local Sales & Use 1%
Northampton TOT 5%
Total Taxes Per Reservation: 11.3%
Some states include the Airbnb Service Fee in tax calculation, along with nightly rate and any fees (cleaning fee, pet fee, etc.). Some states only charge the Occupancy Tax on the nightly rate plus fees. It appears that Airbnb is calculating taxes on the total of the nightly rate, plus fees, plus Airbnb Service Fee. Not even sure they are doing that correctly, as the Northamton website says TOT should be on the "cost of lodging". I guess they consider the Service Fee as part of the cost of lodging for TOT?
Sample Reservation – Calculate Taxes
Nightly Rate + Cleaning Fee + Airbnb Svc Fee = $1,749.42
$1,749.42 x 11.3% = $197.68
Tax Breakdown
$1,749.42 x 5.3% State Tax = $92.72 (round up)
$1,749.42 x Northampton 1% Sales Tax = $17.49
$1749.42 x Northampton TOT 5% = $87.41
$92.72 + $17.49 + $87.41 = $197.68
Excel Spread Sheet Template - Example
Are you having fun yet? 🙄😒
Let us know how it goes, as there are obviously other Hosts in the same predicament.
Airbnb really would be burdened if they had to provide individual tax statements for all the local jurisdictions for over 7million Hosts. What I don't understand is why they don't break down the taxes on each reservation and provide the name and percentage of taxes? Perhaps they feel it would make the reservation detail too complicated and busy? Other platforms do the same as Airbnb and just show "taxes", but if you click taxes it will show the name of the jurisdiction and percentage.
Northampton 1% Tax
The 1% Northampton Tax comes from the State of Virginia Retail Sales Tax website:
https://www.tax.virginia.gov/sales-and-use-tax
They collect a state sales tax of 5.3% and Northampton 1%. There is a sales tax rate lookup by address if you want to check your listing address and see what the rate is:
See my post above on how to calculate taxes on each reservation.
Remember, you need to add the 3% Host Fee back to your Gross Earnings AND the Airbnb Service Fee back to Gross Earnings to come up with the taxable amount. You'll have to look at the Reservation Detail to get the Airbnb Service Fee on each reservation, or I think it's available if you download to CSV file from the Reservations Section. You have to set the dates in filters Jan 1, 2024-Dec 31, 2024 for completed reservations.
You can also printout a list of all the reservations to refer to:
