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

@Mark116 I am due to renew my permit and was asked again this year to pay for the occupancy tax.  Last year I had  to pay a large amount.  I was dreading this again, but you mention a 'provisional permit'... do I need to ask the housing authority for this or is there an online form?   Thanks in advance!

@Lisbeth48  After we submitted the permit renewal, including the print out of reservations for the year, the city emailed us with the provisional permit option, which included a statement you sign that indicates you believe Airbnb is collecting the tax and that if the city can't recover the $ from Airbnb you agree to pay it at the next renewal.  

@Mark116 Thank you so much!  Last year I was told that either I pay the tax due or I had to remove my unit from Airbnb. I felt pressured to fork over the check.  Glad to hear they are trying to get airbnb to pay up. 

 

@Lisbeth48  Yes the same thing happened to us last year.  We had no idea anything had changed and were blindsided by the city's demand that we pay the occupancy tax ourselves when we filed for the renewal.  We considered a small claims case against Airbnb, but because of the time crunch,  we decided to pay the $$ so we could get the renewal.

Ted360
Level 2
Jersey City, NJ

Thanks @Mark116  I too have seen that provisional permit, so hopefully airbnb and Jersey city can come to an agreement for the future, but it doesnt change that in the past hosts have had to pay these taxes to jersey city, on airbnb's behalf, as they airbnb agreed to collect and remit them and clearly have not, but refuse to acknowledge or properly compensate the owners for doing so. 

@Ted360 if you have had to pay taxes that Airbnb have not remitted then perhaps you could claim these from Airbnb in the small claims court? 

Ted360
Level 2
Jersey City, NJ

Thank you @Mike-And-Jane0,


First, the amount of conversation and evidence I have provided and invested, should make this option not necessary.

 

I have considered this option, and still am, however the likely need to pay a lawyer, rather than futile-y representing myself, given airbnbs strong legal arsenal, removes the benefits of re-compensation.

 

Airbnb is certainly aware of this as they are essentially dealing with a couple hundred individual hosts, all with a couple thousand dollars out of pocket. Combined it’s a hefty amount, in an individuals eyes, but at the individual home level, the potential money back vs legal costs needed decreases the popularity of this option.

 

I will however not let this rest, but am hopeful I can actually receive thoughtful communication and a reasonable resolution without resorting to legal action.

 

Appreciate your comment though,

 

ted

@Ted360 from what others have said Airbnb often do not bother to defend actions and hence judgement just goes against them. I don't know the US process but in the UKK it takes about 10 minutes on a computer.

Ted360
Level 2
Jersey City, NJ

I too am not familiar with that nitty gritty, but do you know if it has also affected their status as a host? I want to maintain and establish a mutual relationship as I like airbnb, just not how I am being treated and dealt with. 

@Ted360 apparently it didn't affect them in any way. I have no chance of finding their post though I am afraid.

Jennie181
Level 2
Jersey City, NJ

Does anyone have an update on what AirBnB is doing to pay the occupancy tax to Jersey City.  I recently became a host and its my first year as a host in Jersey City, and the City has indicated that if I don't sign a form that indicates, "If AirBnB doesn't pay the occupancy tax, the Host will be responsible".  This is unacceptable since AirBnB is already collecting 6% from our guests and now the City is collecting 6% from the Host.  

Does anyone have any advise on what we, as Host, can do to prevent this from happening.  Yes, i know we can increase the daily rate to our guest but it just bothers me that we are trying our best to provide a great service just like the Hotels, and we are being penalized.  

Thank you all for any feedback.

@Jennie181 I would sign the form and then, if Jersey City says Airbnb hasn't paid the tax and you know they have collected it, I would sue Airbnb in the smalls claims court.

Has anyone here sued and won in small claims court.  If so, can you provide information on what happened.  Thanks

You can file an arbitration claim. Search for "how to file an arbitration claim against Airbnb" and go the FairShake link. You can either follow this process yourself or have FairShake do it, which is easier but will cost you some percentage of whatever you ultimately recover from Airbnb. It's a two step process: first you (or FairShake on your behalf) send Airbnb a demand letter, and then, if they ignore the letter or you can't come to terms, you can file the arbitration claim with the American Arbitration Association, which will then go through the arbitration process. It's a little tedious, but Airbnb can't ignore the arbitration claim (otherwise they'll lose by default) so they will have to deal with your claim. You don't need a lawyer, and the AAA provides a lot of documentation about the process, but some knowledge of the law and legal procedure definitely helps.

I should mention, you have to pay a filing fee to the AAA (I think $200) also also pay the arbitrator for their time (assuming it gets that far) so be sure to include those costs (and the FairShake fee) in your claim.