Determining the exact breakdown of Occupancy Taxes on a city/state level

[Collin18]

Holy smokes is this proving to be challenging. As a host of an airbnb in Nashville TN, on each transaction, I can see an "Occupancy taxes" section that has a dollar amount associated. This, I know, is standard.  I am trying to get a breakdown of that single dollar amount to understand how that amount is being distributed amongst both the state of TN (state sales tax and county tax) and the local municipality (Occupancy tax + other local fees).

The reason I am looking for this is that the TN Department of Revenue asks on their business tax forms that I differentiate the exact amounts of both.  Airbnb and the TN Dept. of Revenue is saying that the other person is responsible for this information. I've opened up a support ticket with airbnb but so far, I'm hitting a dead end.

Can anybody shine some light on how I can determine the exact breakdown of the Occupancy taxes section?

Thank you!

[Lorna170 · Accepted solution]

@Collin18  Like you I need to complete tax forms that show the dollar amounts collected for several different categories of taxes, and all that AirBnB will provide me with is a single tax amount.

I have an excel spreadsheet that I use to complete my tax returns.  I know that my State tax is 4.75%, my County is 2.25% and my municipality is 6% -- total of 13%.  On the spreadsheet I enter the amount that the guest paid for the nights rented (inclusive of cleaning and pet fees) and the AirBnB service fee.  I then apply the three tax formulas to get the individual tax amounts that I need to show on my tax forms.  

Looks like this:   

690 Rent + 97.41 AirBnB Fee = 787.41

787.41 times 4.75% State tax = 37.40

787.41 times 2.75% County tax = 17.72

787.41 times 6% Municipal tax = 47.24

Total taxes collected by AirBnB = 102.36

AirBnB is never going to provide you with anything to differentiate the taxes collected and the separate amounts.  Heck, they don't even provide a statement or form that you can attach to your monthly/quarterly or annual tax returns verifying that AirBnB collected and paid the taxes you owe.  

[Collin18]

This is a great thoughtful answer. I'm happy to know somebody has at least been through this before and I wasn't missing something. It seems so bizarre that they would not provide this information, especially if states are asking for it from those paying the taxes. 

I'm going to take a look at how you derived your numbers and see if I can apply that to my own transactions from last year. I appreciate the deep dive.

[Edwin446]

How did you file the state sales tax?  If they collected the taxes why is the NCDOR asking me to pay?

[Lorna170]

@Edwin446  You have to file a "zero tax due" E-500 with the explanation form.  You can do this on the NCDOR website.

AirBnB does not provide NC with a listing of the hosts that they collected taxes from.  You have to protect yourself with a paper trail of tax forms.

Talk to a tax accountant!

[Deanna216]

That's a thoughtful, thorough answer…the community I'm sure, is very grateful.

@Lorna170 

As far as my situation, may I ask?….

My rental property is in Ixtapa, Mexico (a beach front property).

Do I have to pay taxes to both USA and Mexico government? It's very confusing…As of yet, I'm only paying the income taxe here in USA…I don’t

-as of yet- have tittle for my property ( don't ask 😚)…

Once I acquire tittle, (if we ever do), and I start paying Mexican taxes, will I be required by USA tax laws to continue paying income taxes here in USA for the same income? All my income is paid to my American bank account now. I wonder if I only were to have all the income deposited to my Mexican bank account by AIRBNB...would that make a difference on my obligation to the IRS….?

I would really appreciate your kind insight and reply. 

Deanna

[Lorna170]

@Deanna216  I don't know anything about filing taxes earned in another country -- I can only suggest that you speak to an accountant.