Airbnb did not remit enough occupancy taxes leaving me to foot the bill to my local tax authority.

[Susan525]

What do I do? My city/state says I need to talk to Airbnb but needs to be a level or two above customer service. Is there a legal or tax compliance person to talk to there? (They said they remitted $600+ but my bill from the city was $1700+) TIA

[Mike-And-Jane0]

@Susan525 Airbnb and local tax collection is a nightmare. As a minimum though you should check that the correct taxes are being shown when a guest books (just make a few fake bookings yourself but stop before the payment page!). At the end of the day Airbnb is just like the tax experts you may have doing your tax returns. They only give advice/help but paying the correct tax is down to you alone

[Joan2709]

@Susan525 

As @Mike-And-Jane0 point out, ultimately it is up to the Host to ensure all taxes are collected and paid to the appropriate taxing authorities. This can get quite complicated, but the final responsibility for payment of taxes rests on the Host. Airbnb does collect/pay taxes in some jurisdictions, but not all.

Hosts must determine what taxes are owed and who is collecting and paying the taxes. Sometimes Airbnb will automatically collect state sales tax and/or occupancy tax, but not local city/county tax. Sometimes Hosts can add these local taxes as a custom tax in these jurisdictions and sometimes they can't. Taxes are generally charged on the nightly rate + cleaning fee for Occupancy Tax. Sales tax is charged (in some states) on the nightly rate + cleaning fee + Airbnb Service Fee. 

How Tax Collection & Remittance Works

https://www.airbnb.com/help/article/1036

"...We automatically collect and pay taxes on behalf of hosts only in certain jurisdictions. Hosts may need to manually collect and remit taxes in other jurisdictions and in certain listed jurisdictions where Airbnb does not collect all applicable taxes on accommodation..."

Airbnb lumps all taxes under the line item "Occupancy Taxes" on reservations. They are paid in one lump sum to those jurisdictions they have an agreement with; they are not broken down by each listing when payment is made to the taxing authority:

Sometimes, 3 types of taxes are involved at the State and/or local level:

1. Sales Tax (most states)
2. Occupancy Tax (Hotel/Bed Tax)
3. Special Use Taxes

You can check what jurisdictions Airbnb is collecting for (but not the percentages) on your listing by going to the preferences icon and selecting Taxes:

Then I suggest you review the Colorado Sales and Occupancy Taxes as well as the local city/county taxes that are required. Sometimes there are also special use taxes that apply. It's complicated. A quick internet search shows:

Colorado STR Taxes 29nights or shorter:

State of Colorado Sales Tax: 2.9%

State of Colorado Occupancy Tax: 10.75%

Looks like you are in Arapahoe County and also possibly in the City of Glendale? You'll have to check with them to determine what addl sales tax or occupancy taxes are required. This is based on the listing's legal address.

Here is an example of a reservation and a breakdown of the taxes in Washington State:

[Mike-And-Jane0]

@Joan2709 and I thought taxes in the UK were high. Thankfully our counties and towns are not allowed to add additional taxes to our listings so we only have central government taxes which are zero for most hosts (except for the 20% VAT (sales tax) that is added to Airbnb's charges).

[Joan2709]

@Mike-And-Jane0 

It does make one wonder why these muncipalities would want to severely restrict Airbnb (STRs) in their jurisdictions as they generate alot of tax revenue? 🤔 One would think they would have a more measured approach so as not to "kill the goose that laid the golden egg" as it were?

A mystery....😁

[Elisa]

Hi @Susan525 😊,

Welcome to the community, and thank you for asking this question here!

Have you found a solution?
Our Hosts shared great advice with you. Did you get a chance to review it?

I look forward to hearing your thoughts!

Warm regards 🌻