Airbnb failing to remit accommodation tax to Jersey City, leaving JC hosts holding the bag

Willis8
Level 4
Jersey City, NJ

Airbnb failing to remit accommodation tax to Jersey City, leaving JC hosts holding the bag

During the process of renewing my Jersey City short-term rental permit, Jersey City demanded that I pay the 6% occupancy tax on my Airbnb bookings for the past year. This is about $3,600 in my case.

 

Airbnb collects the accommodation tax from my guests and is supposed to be remitting it to the city. (See the screen shot from my listing.) However, Jersey City states that Airbnb has not been paying it, and they even sent me several monthly tax filings from Airbnb showing Airbnb  claiming to owe $0 in taxes. In other words, for at least these time periods, Airbnb was collecting the accommodation tax from my guests and then just keeping it.

 

Jersey City did show one filing from Airbnb (also attached) in which Airbnb made a tax payment of about $76,000. However, Airbnb did not provide any documentation about which units, reservations, or time period that that amount covered, so Jersey City says they cannot know whether the taxes for my unit have been paid or not.

 

I have sent messages to Airbnb about this. Airbnb initially sent me a message saying that I could see the amounts paid to JC in the my earnings report. But this is not true, I can only see the total amount collected from guests for all taxes; there is no indication how much was paid to JC or when it was paid. Airbnb asked for additional documentation showing the JC tax was not paid. I sent them the copy of their own filing showing $0 paid. Airbnb then just replied with the exact same pat response about checking the earnings report.

 

Obviously this is a dispute between Jersey City and Airbnb. Airbnb is supposed to be collecting and remitting the tax. Jersey City wants the taxes paid on time and wants details about which units are covered so they can match with their STRP records. But Airbnb can't be bothered to either remit the taxes or provide the details that JC needs, so JC is going after the hosts for the money because that's easier than chasing Airbnb.

 

It's unconscionable for Airbnb to take money from my guests and then fail to remit it to Jersey City, leaving me with a $3,600 bill that I have to pay on my own.

 

Shame on you, Airbnb.

 

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**[Private conversation removed in line with the Community Center Guidelines]

64 Replies 64
Willis8
Level 4
Jersey City, NJ

It's easy for Airbnb to fix this. All I need is a statement showing, how much they paid to Jersey City for my units, and when they paid it. They must have this information available; how could they manage this process otherwise?

I totally agree with your statement.  If Airbnb just shows on a official document how much taxes they have paid to Jersey City then it would be good.  Its like how my mortgage company shows how much in property taxes etc they have paid, which we would use to file our taxes.  

Jersey City has informed us that they do receive money from AirBnB but it doesn't show how much each listings are paying and as a result they can't be sure whether our listing is paying our fair share of occupancy taxes.  

Mark116
Level 10
Jersey City, NJ

@Willis8  The same thing happened to us, although we didn't have to pay as much as you, it was still a shock to  have to come up with a large amount of money out of the blue.

 

I know that at least for the first year that Airbnb-Jersey City relationship on tax payments went smoothly, so whatever Airbnb did, must have satisfied the city, which means they could go back to what they were doing before.

 

I also tried to get a straight answer from Airbnb and never got anything concrete, certainly nothing I could use to prove to the city that my occupancy tax had been collected and paid to them.

 

 

Mary419
Level 10
Savannah, GA

This is so concerning to me! Thank you for posting this and I am amazed NJ showed you the proof too. Georgia passed the law last May requiring the major marketplaces (Airbnb and their main competition site) to collect and remit ALL local and state taxes for short term rental transactions through their sites. 

 

Having done it myself for years and being accustomed to how tightly Georgia and Savannah regulate that tax money,  including random audits, I spoke to employees at the state, city and county levels about this change. ALL of them expressed that it would not be my problem regarding proving that the tax money reached its destination. They said as long as I could prove the money went through those "marketplace" sites then I would not be responsible to collect/remit it directly myself.

 

The ladies who work in these revenue offices were very sympathetic with my concerns and so we chatted and they admitted were not sure how well it would work but it was out of their hands too as it was a law passed at the state level. They each specifically expressed worry that it would not be easy to audit since the marketplaces were NOT required to send a list of which addresses were involved in the taxable sales. 

 

Zero means you had $0 taxable sales!  Airbnb would never have a zero return for any state, because they do at least SOME business every month in every state. A Zero return is a place holder for a business that wants to stay officially open but is really closed for a while and not doing any taxable sales for a month or longer.... it is supposed to be for little old shop owners who are only open seasonally or something like that. It would never be appropriate for a company like Airbnb.

 

Obviously this zero return is highly suspicious and triggers a red flag at those revenue offices.   

 

This is not a small amount of money we are talking about. And yes it means Airbnb collected it from guests and did not remit it to the state. What a disaster! 

 

Ted360
Level 2
Jersey City, NJ

Same thing happening to me, and airbnbs customer service has been awful considering the error is entirely there's, and the sums of money hosts need to pay out of pocket, (2,500+ for me that needs to be reimbursed). Their algorithm was obviously not collecting the appropriate taxes for jersey city, but that does not release them from their obligation to remit the 6% to Jersey City. Awful experience, especially when their whole brand persona is how much they care about their hosts. 

@Ted360 @Willis8 Have Airbnb been invoicing your guests with the tax? If so then surely they are liable to pay and a small claims court would make them do so.

Yes, Airbnb has charged my guests for the occupancy tax. I would probably win in small claims, but filing a small claims action in California is difficult when you live in New Jersey. I'm not sure if I can file in NJ, since I don't know if Airbnb actually maintains an office here.

@Willis8 I won a small claims case against Airbnb in my home county in Oregon. You don't have to file in California.

@Mike-And-Jane0 Airbnb collects taxes, but when I broke them down, based on airbnb's agreeements listed here https://www.airbnb.com/help/article/2317/occupancy-tax-collection-and-remittance-by-airbnb-in-new-je...  they have consistently missing the Jersey City specific 6% tax. Obviously this doesn't remove them from liability here. I get the sneaky suspicion they are well aware of the issue, have calculated how much they do actually owe, and are doing everything in their power to avoid reimbursing us for that which we have paid to the city on airbnb's behalf, hence the mixed messaging, delays, and false information responses from them with no honest conversation, accountability, or to be frank respectful treatment of hosts. 

It does seem like Airbnb is under-collecting. MyLodgeTax says that the total tax for my location is 16.63% but Airbnb is only collecting 10.19% from my bookings. So someone's not getting paid, but it's impossible to tell from Airbnb's reports who that is. Thanks for nothing, Airbnb.

John5097
Level 10
Charleston, SC

@Willis8 You might try switching over to Pro Tools. There you can see what taxes ABB is paying. It may be that they are sending it to the county.

From what I understand the  city, county and state have an agreement with Airbnb for them to collect taxes and pay them. Airbnb collects all taxes from both legal and illegal listings, lumps them all together and pays it in lump sum to various government agencies. This means local goverments have no idea which listings got paid. In some places the county collects and pays the city, and both kind of turn a blind eye to all the illegal listings as they get more than had it just been from the legal listings. 

I suspect the accommodations fees may have been sent to the county, and because the city got $0 they are now requesting host to pay. 

You can switch over to Pro Tools and find out where ABB sent the funds, if they sent it to the county, state, etc. 

@Mary419 I hope South Carolina also passes the same policy. The goverment agencies are the ones who entered an agreement to ABB to collect and remit taxes and accommodation fees. I would rather just collect and pay them myself but can't find that option.  

In South Carolina, if a host lives on the property no county, or state taxes are due. However, Airbnb still collects from my guests. This extra fee places my listing at a disadvantage.  Imagine if they were not collecting a tax not due? I would get more bookings because my price would be lower. What can be done. 

Willis8
Level 4
Jersey City, NJ

@John5097 I am using Pro Tools. Where are you seeing the info about the taxes paid to county etc.?

@Willis8 

Click on My Listing >Pricing and Availability > Taxes > Edit 

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