Arizona Occupancy Tax

[Karl28]

I have confirmed the occupancy tax is being collected by airbnb for bookings in Arizona occurring after 01/01/2017...The terms of service state that hosts can view the amounts collected in the transaction details...no such information is available.  The agent I spoke with at ADOR has no information regarding airbnb remitting taxes on my behalf.

I have now made 3 calls to airbnb support asking how this process works...they pass my queries on to the tax department and they respond via email to consult the help center which doesn't seem to have an answer.  I need confirmation that tax dollars charged guests is being remitted somehow and credited to my tax liabilities which I am responsible for reporting and paying monthly.

I would think ADOR needs airbnb to identify my TPT license number (which they don't have) to insure remittance gets to the correct account and can be funnelled to the different agencies where tax is due. Surely someone can tell me where the tax revenue collected goes and how it is applied to my tax liabilities.

[Greg-Or-Lani0]

Annette or Curtis, sincere thanks for your feedback.  You hit it on the head when you stated "I don't think you'll get any valid answers from Airbnb any time soon"...  This is infurating to me that this company is not willing to listen or learn and in fact is chosing to not respond to guests or hosts, even when facts are produced and provided.

Regarding your questions, I received a screen shot from my guests as well so I could see what Airbnb was providing to them.  These guests did book in February 2017 for a one week stay beginning March 10th.  Their charges detailed on the Airbnb site were $907 for the stay and $110 for the cleaning.  Taxes are calculated on this value and the billed tax amount for my guests was $115, plus their share of the Airbnb fee of $114 (I will be assessed another $31 in addition that which will be netted out of the proceeds along with a 3% merchant processing fee).  You are correct, the percentage is not 13%, it is the 11.308 in this case.

I subscribe to the AZ DOR communications and changes are transmitted to subscribers.  The link address is below, you will note that the communication is clear and fairly straighforward, albiet locations like mine will require a validating call to the department.   My remote cabin property, while having a Prescott mailing address, was not in the Prescott city taxing jurisdiction.  This is easily verified by this department by providing an address or parcel number.  The correct tax is therefore 6.235%.  Third party tax services also quote the same tax rate.  

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You are subscribed to Transaction Privilege & Use Tax for Arizona Department of Revenue. This information has recently been updated, and is now available.

TPT Tax Rate Table - March 2017

02/22/2017 10:48 AM MST

Archived TPT Rate Tables

https://www.azdor.gov/Portals/0/TPTRates/03012017RateTable.pdf

I thought that with these facts, Airbnb could validate the tax rate and in the event they over collected, they would be willing to refund the $44.37 overcollection to my guest.  That process started on February 9th and continues through this evening.  Airbnb has been anything but helpful-the question was routed to the tax department abyss who refuses to respond and now no one at Airbnb will intercede.

And as I stated in my earlier post, if i cannot get Airbnb to earn their service fee at this juncture with a simple, documented question, what happens when the State DOR decides they want proof from me or Airbnb of the proper collection amounts and remittances?  Yes I have heard of the "Airbnb agreement" and at present take no comfort in it if it in fact exists (I have never viewed it).  

Sorry fellow posters for the length and tone of this post, I have never experienced such poor customer service or disregard... I am angry.  Greg in Prescott   

[Greg-Or-Lani0]

correction to my post, the correct tax is 6.325% (didn't catch my transpostition).  

[Jeannette-And-Frank0]

thank you for posting the tax rates and where to find them.  i am new to this and appreciate any help i can get filling out forms and paying my dues.  i agree that airbnb has not made it easy to navigate the tax issue.  i would rather be responsible to do this myself. 

[Ally12]

Hi All,

I have also done this mind-numbing activity with Airbnb.  What seems to happen with Airbnb and our State of Arizona is that the word "everybody is good with this" applies only to the taxing authorities, and the willingness of Airbnb to create their software to collect and mail the taxes.  However, my sense is that the rates being chosen by Airbnb for taxing purposes are NOT the legal rates particular to each city, county and state.  In my case I have a single inexpensive room that I rent for anywhere from $30 to $40/day depending on the time of the year and the holiday.  For this small amount my guests pay as much as $9/day in taxes.  To ME this is outrageous.

I am not in the business full time and my room is not rented full time, nor do I supply any support services as food and daily cleaning of the room.  Therefore I do not describe as a Bed and Breakfast business either.  But my guests are charged for taxes as if they were renting a hotel room.  This is borderline insane.  

What has constructively happened is that each one of us has been affected by the "no response" position taken by Airbnb in not addressing this issue, and I'm constantly reminded to "check your prices" to see if I'm competitive from their software program.  At $30/day it hardly pays to clean.....let alone make any profit.  IF I lower my prices I might as well not be a host, and I enjoy it too much to do that.  I'm also constantly reminded that Airbnb has a policy of open renting to anyone who requests our rooms. (Remember: Rent to a Refugee.)  Well, this is a testy policy if, for some reason, we do not feel comfortable with the prospective guest. (I have turned down two prospective guests in six years due to "a funny tingling" I got when I communicated with them.  After I declined their request both of these requesters became irate....proving my "spidey senses". )  Airbnb acts as if our private homes are THEIR ASSETS, NOT OURS!

Therefore, I believe that it is constructive for all of us as hosts to, perhaps, create an organized grievance committee and make it known that there are issues here that need to be addressed.  Since our guests are paying these taxes on top of our rent rates our guests should chime in here as well. (NOTE:  When I travel in any other foreign country there are NO TAXES charged!  I have not traveled in all countries.)

If any host out there feels they know exactly how these taxes are figured for each listing please let us all know please.  I'm also concerned about what Arizona considers to be those eligible to pay these taxes.  I'm not sure we all qualify for them, but we are all paying them, or in fact our guests are paying them which increases their costs and might negate their choice of one listing or another due to the high price of the add-ons.

Let's keep this topic current!

Ally

[Jeannette-And-Frank0]

dear annette  thank you for posting the deduction code.  i am just now learning how to file, that was very helpfull.

[Chris225]

Annette,

Thanks for the information and post! Though I have a question you may be able to help out with. How did you figure out the deduction code to use was 11-23? I fail to see that listed on the AZDOR website:

https://www.azdor.gov/Portals/0/TPTSimplification/DED-TL.pdf

https://www.azdor.gov/TransactionPrivilegeTax(TPT)/RatesandDeductionCodes/YavapaiCounty.aspx

https://www.azdor.gov/TransactionPrivilegeTax(TPT)/RatesandDeductionCodes/Prescott.aspx

I did find codes 11 and 23, but they do not seem to be related to 25 (transient lodging/hotel tax) or AirBnB paying occupancy tax.

011 - RESTAURANTS AND BARS 011 PR 2.00% [Prescott]

023 - Recreational Vehicle Surcharge [Yavapai]

The deduction codes that seem most applicable are (https://www.azdor.gov/Portals/0/TPTSimplification/DED-TL.pdf):

640 - BUSINESS ACTIVITY TAXED under OTHER CLASS

775 - TR LODG: ONLINE LODGING OPERATOR INCOME from REGISTERED ONLINE LODGING MARKETPLACE

I feel the repsonsibility resides in AZDOR letting business license holders know how to file. So far I haven't had much luck in finding out the correct way to do this. I have a call into AZDOR with a call back expected from the supervisors to advise exactly how to file on aztaxes.gov

I was able to change from monthly filing to quaterly filing (yearly was not available to me).

Thanks a bunch! Chris

[Heather-and-Bryan0]

 Did you ever get more information from them about how to properly file? I'd appreciate any assistance because the state just rejected ours when we used code 640.

[Karl28]

Yes...I heard from airbnb...the following:

My name is Danielle with Airbnb. I hope this message finds you well. I understand you have some questions regarding tax in Page, AZ that Airbnb is collecting and remitting on your behalf.

We are currently collecting General Sales and Use Tax (Arizona), General Sales and Use Tax (Coconino), General Sales and Use Tax (Page), and Accommodations Tax (Page).

We will be filing one tax return per jurisdiction, with the total combined reservation revenue. This means that all hosts located in your area will be represented by one remitted amount, and we will not be providing your personal information on the return.

If your local authority has reported that they don't have a record of your remittance on file that may be because the taxes are reported under a registration number, and not under your name.

Additionally, you can export a helpful spreadsheet accounting for your earnings and taxes by going to your Transaction History, selecting the desired year, and clicking “Export to CSV”.

I hope this is helpful. If you have additional questions regarding policies in your area, we recommend reaching out to a local tax professional or the local tax authority.

Best,

Danielle

AZ DOR the following:

Online Lodging Marketplace

Start_Module_1752

A landlord may offer a rental property on an Online Lodging Marketplace (OLM) or another type of digital platform. If the OLM is registered with ADOR, the registered OLM is responsible for filing and paying the tax (if applicable) on the transactions made through the OLM. The landlord is still responsible for obtaining a TPT license with ADOR and reporting and paying tax on the gross income received from all taxable rentals, but may deduct (deduction code 775) the income received from transactions associated with a registered OLM.

If the OLM or other digital platform is NOT registered with ADOR and the landlord has NOT received documentation that the OLM will remit the applicable tax, the landlord is responsible for filing and paying the tax on the gross income received from taxable rentals.

I've been filing with 775 as a deduction code for taxes on revenue collected by airbnb and this seems to work as I have received no notices from AZ DOR to the contrary.  Hope this helps...

[Chris225 · Accepted solution]

Hi Karl,

Thanks for raising this question, it's a great change in 2017 that many AZ hosts need to understand. I've been doing AirBnB hosting since October 2015 and I am also curious how to now do the TPT-EZ or TPT-2 form due to the change this year. I understand AirBnB is collecting occupancy tax for the state, however, I'm unsure how to document this on the TPT-EZ form--or if it's even required.

Also, it looks like AirBnB is collecting both State, County, and City.

For instance here an example of how it could be laid out:

Date	Gross	AirBnB Fee	Host Earned	AirBnB Occupancy Tax Collected	Taxes Due (State & City)	Taxable Earned Income	City Taxes	State Taxes
2017-01-01	$158.00	$5.00	$153.00	$17.00	$15.59	$142.41	$5.77	$9.83

From this example, a host would owe $15.59 to the state for this night. AirBnB collected and paid the state $17. In this example it doesn't seem that the host would owe anything to the state or city. But how are they to let the state--and city for that matter--know that they are all paid up.

I understand our city is also quite concerned about getting paid from the state, and we had to recently add our city as a region in AZTaxes. What I don't understand is how I know as a host and holder of a state business license, that the state and city and I are on good terms--that AZDOR is getting the taxes required from me via AirBnB, and AZDOR is designating funds to the county and city on my behalf.

[Annette33]

seems that for right now the AZ authorities are also confused about how exactly it is going to work with Airbnb, as the pay through Airbnb to the authorities just got initiated starting in 2017. For now, I decided not to worry about it, as each booking contains the tax amount Airbnb collected on our behalf. When we first signed up for Airbnb, we all filled out a W9 form with our social security number, so I think the cross reference to properly submit it is handled via the SS number.

Here is what I can tell as of now about the breakdown of the tax collected: 

[Sarah590]

Hi Annette, is there a way I contact, besides on a message board, to hopefully have you answer some direct questions I have as a new host to Airbnb in Prescott? I would really appreciate your help!

[Sarah590]

That sentence came out all wrong:  Is there some way I can contact you

good grief.

[Annette33]

hi @Sarah590 , i just sent you a DM with my phone number. talk to you soon....

[Teresa53]

If I start a Airbnb rental this year, 2017, do I need a TPT license?

[Paul398]

Yes, even though  Airb&b pays the money to the state,  you still need to file TPT.