Austin Hotel Occupancy Taxes

[Fionn17]

Good Evening fellow hosts,

I'm writing this because I'm trying to understand why and how city/state taxes are set up the way they are for short term rentals, specifically those here in Austin. I also would like to discuss and present rationale for a solution in mind.

AirBnB itself collects the state tax of 6% but neglects to charge the other 11% tax rate for the municipality. This is frustrating because there are countless AirBnB's in Austin, many of which I can only assume are not collecting or paying the 11% hotel occupancy tax (which is a ridiculous amount of money by the way.) I have gone through the process of getting my AirBnB permitted and am collecting/paying the city occupancy tax however there are a lot of AirBnB's here flying under the radar which I can only assume are making 11% more than me per booking. Now while it's very possible the municipal tax man will catch up to them I have a hard time believing that this is ever going to happen and find it unfair that going through the process of doing things right is leaving dollars on the table whilst many get away without paying their dues to the city.

I believe the solution to be simple. As previously stated, AirBnB collects and pays state occupancy taxes which I have no problem with and find very convenient, one less thing to worry about. Can AirBnB not collect the 11% on the behalf of all AirBnB's in Austin? This would make it fair to everyone and completely eliminate the widespread fraud. It's done in many other cities and counties in Texas, why not Austin?

Now I have to mention, I don't agree with how strict Austin's policy is on short term rentals and think that they are generally good for the city and even neighborhoods. For those hosts out there that aren't permitted but run great AirBnB's that harm no one, I wish it was easier for you. I just think if one person has to pay a tax we all should.

I'm sure if you don't collect and pay the city taxes you may be mad at me for posting this because you are getting away with a lot more money. In the future, however, you may get caught through state disclosures or disclosures of AirBnB to the city which would lead to ENORMOUS bills, fees, maybe even criminal charges. With AirBnB collecting the tax, there is no risk of this and no one person is getting cheated out of their paycheck. 

I know that I can personally turn on professional hosting tools and add the municipal tax myself however this will still factor into the cost presented to guests when booking the place and when compared to other booking results in my area, my rental will of course show to be 11% more expensive than a comparable rental... 

If you agree or disagree I'd like to hear it and why. I want AirBnB to be a place where guests and hosts alike are not competing with unfair practices and can do so in harmony. 

[Sherry397]

I'm very confused, also in Texas. Where is the filing info located where they paid the state taxes?  I just had to manually pay my city hotel tax and it wants a copy of the state comptroller form.  I don't see that anywhere.  Do you know?

[Mark116]

@Sherry397  I can't speak for Texas, but here in Jersey City we just renewed our permit for another year and WE had to pay the city occupancy tax that Airbnb says they collected from guests.  The city was adamant that Airbnb had stopped paying this $$ and we could only get a renewal if we paid it ourselves.  Eventually, we will probably sue them in small claims court to get the money back.

[Sherry397]

Is Airbnb paying your STATE Comptroller?

[Meredith203]

I agree with your thoughts. The onus of collecting and reporting city tax on the individual owner will very likely (and is) leading to inconsistent practices. Which in the short-run, could negatively affect the homes that DO charge the 11% City of Austin Hotel Occupancy tax. Especially since it doesn't legally affect the traveler whether they stay at a property that does or does not charge the 11% city tax (which all STR should). 

[David6613]

You have described the situation well - and it is widespread in Texas beyond Austin. Hosts are incentivized to ignore the local HOT (11% in Austin) and allow Airbnb to auto-collect and remit the state HOT (6%), only. Honest hosts who go through the proper steps to collect and manually remit the full HOT (i.e. 17%) are at a competitive disadvantage with the numerous offerings that only require 6%. Because final sales specifically state that all fees and taxes are included, how is the local HOT collected for the many (many) listings in Austin (and other Texas towns) that show 6% HOT in their listing (this question is rhetorical)? Some cities (e.g. Houston) have agreements whereby the local HOT is also auto-collected and remitted by Airbnb. A simple solution would be to standardize the collection of all HOT regardless of how the remittance is managed.

[Christopher1515]

Experiencing the same frustration with the AirBnB system. Love it for all of the things it does well, however the municipality tax is not handled acceptably. Surely there's a setting that can be added so that at the very least guests are made aware of an additional tax and that it be collected by the system. Unless I'm missing it, there isn't even a way to customize under additional fees to collect the local taxes. Anyone have a workaround?