Email regarding taxes

[Craig-and-Stephanie0]

I received this letter from AIRBNB. but I’m confused because I thought they already collected and remitted these ? 

 

[Joan2709]

@Craig-and-Stephanie0 

Can't see the whole email in the screen shot so not sure? Normally Airbnb lumps all the taxes under "Occupancy Taxes" and when you click the line item, it might state the jurisdictions they are collecting for, but not the amounts. I can barely see the bottom of the screen shot says something about a separate line item on guest reservations, but can't really read it on the screen shot? If they will be doing that, it is something new.

Have you been able to contact Airbnb about it? What did they say?

[Craig-and-Stephanie0]

Hi Craig & Stephanie,

Great news! Airbnb will start collecting and remitting the following tax(es) imposed by the below State for all reservations booked on or after January 1, 2025.

State Name:

• Alabama State

Tax(es) Name(s):

• State Lodging Tax

• Locals Lodging Tax

• This is in addition to the taxes that Airbnb currently collects

Guests will see a separate line item for the tax(es) when booking. Airbnb will collect and pay the tax(es) to the jurisdiction at the next filing due date.

I’ve been collecting the above tax(es). What do I do now?You’ll no longer need to collect the above tax(es) for transactions completed through the Airbnb platform from guests who book their reservation on or after January 1, 2025.

Are there other taxes that I need to collect?There may be other applicable taxes to your listing that Airbnb is not collecting and remitting on your behalf. You are responsible for understanding and fulfilling all of your tax obligations.

If there are other applicable taxes that you need to collect from your guests, the process for collecting is outlined here.

If you’re a hotel contracting with Airbnb Travel, LLC through HotelTonight, the process for manually collecting and remitting on the HotelTonight platform is outlined here.

As always, you must be upfront about any such taxes with guests before booking.

Will my payouts be affected?No. The tax(es) will be charged to guests.

How do you know what tax(es) to apply to my listing?The tax(es) applied will be determined by the address you have entered for your listing. Please double check the details of your address to ensure you have entered a complete and accurate address for your listing. Airbnb will not be responsible for any tax collection errors due to a typo in the address.

How can I see the amount of tax collected on my behalf?The amount is displayed in the Gross Earnings tab of your Transaction History.

If you’re a hotel contracting with Airbnb Travel, LLC through HotelTonight, you can also see information about your Airbnb Travel, LLC bookings on the HotelTonight platform. Please refer to the Bookings tab in the HT Extranet to view your aggregate performance and booking data.

How will you be remitting tax(es) on my behalf?Airbnb files on behalf of all hosts with bookings in the jurisdiction - we do not file individual tax returns on behalf of each host. This means that all your bookings in the jurisdiction will be represented by one payment amount, and we typically do not provide your business/personal information on the return. We may provide your business/personal data only in cases where we receive a binding request by a competent authority pursuant to applicable law, including data protection laws, and our Privacy Policy.

Do I have any other tax reporting obligations?You may be responsible for other tax reporting obligations. Please contact your local tax authority for more information on what these obligations are.

Do I have any other obligations related to my listing?You may be responsible for complying with local rules and regulations that apply to your listing. Please contact your local government agencies for more information on what these obligations are.

To learn more, please visit our Help Centeror contact your local tax authority for more details.

Thanks,
The Airbnb team

Note: Under the Airbnb Terms of Service, you instruct and authorize Airbnb to collect and remit Occupancy Taxes on your behalf in jurisdictions where Airbnb decides to facilitate such collection. If you believe applicable laws exempt you from collecting a tax that Airbnb collects and remits on your behalf, you have agreed that, by accepting a reservation request, you are waiving that exemption. If you don’t want to waive an exemption you believe exists, you should not accept the reservation.

---

Airbnb, Inc., 888 Brannan St, San Francisco, CA 94103, USA

[Craig-and-Stephanie0]

Here is the entire email. It just makes no sense to me because they have always been collecting these taxes and remitting them to the state

[Joan2709]

@Craig-and-Stephanie0 

I'm not familiar with Alabama, but have Host clients in other states and they all have different options for tax collection/payment. Perhaps another Alabama Host can chime in here and respond. The other option is to contact Airbnb and ask them about it. This is a lengthy response (cause taxes are so fun ☹), so contacting Airbnb may (or may not) get you a quicker answer:

Here is what I derive from the email:

In some states Airbnb collects and pays all the taxes, but does give Hosts the option to "opt out" and taxes are paid to the Host and then the Host is responsible for paying the taxing jurisdictions. From the wording in the email, it seems like some Hosts in Alabama were previously given the option to do that. Some probably had opt-ed out of Airbnb doing default tax collection and payment. Airbnb probably just sent the email out to ALL Alabama Hosts just to cover their bases.

Increased Scrutiny From Local Tax Jurisdictions

Lately, more and more jurisdictions are requiring Airbnb (and other OTA platforms) to pay taxes directly to them and not allow the option for Hosts to opt out and pay taxes individually. Most likely, this is because they realize Hosts may not be paying the taxes due, even though they have been receiving the tax payments from Airbnb in their Host payouts. They want Airbnb to be responsible for collecting the taxes directly from the guest and then paying the taxes directly to the jurisdiction. This may be the case with Alabama. If Airbnb has worked out an agreement with Alabama regarding taxes, it usually means the State receives all the payments on all state/local taxes and then disburses the taxes to the individual counties, cities, townships, or whatever local authority taxes STRs. This is the case in several states for some of my Host clients. I believe we will be seeing this more and more as jurisdictions tighten tax collection and payments for STRs.

Hosts Are Responsible For Taxes

Ultimately, Airbnb makes it clear that Hosts are fully responsible for all taxes, even if Airbnb is, or is not, collecting and paying them. Some Hosts think Airbnb is paying all the taxes, but in some jurisdictions…they don't. It’s up to the Host to find that out. Usually, taxes at the state level are always paid by Airbnb, but local tourism taxes, development taxes, lodging/bed taxes, etc. may not be. New Hosts don't research what is required when listing their property, then get a tax bill from a jurisdiction demanding payment along with delinquent fines and fees.

Always Verify Taxes Are Collected Properly

I always suggest Hosts verify with each taxing authority the taxes due and double check what jurisdictions Airbnb is collecting and paying for. This is found in the taxes section of the Listing. If there was the “opt-out” option previously, it probably isn’t there anymore for Alabama. Go to:

-Listing Editor/Your Space

-Click the 3 lines top right (preferences icon)

-Click Taxes

Here is a screen shot of the jurisdictions Airbnb is collecting taxes on for your listing (they never show the percentage-only the name of the jurisdictions).

Verify Airbnb is Collecting the Correct Percentages

It is always wise to check at both the state and local level to determine what taxes are to be collected, and if Airbnb is collecting them properly. I advise my clients to find out the jurisdictions and percentages, and then look at the reservation details and make sure they are being collected properly. For some of my clients it was determined Airbnb was overcharging the taxes, or worse, undercharging. I also suggest my clients keep an Excel spreadsheet of every reservation and breakdown the taxes by jurisdiction on it. This way they have their own records of each reservation and taxes paid and aren’t relying on Airbnb in case a jurisdiction claims they weren’t paid the required taxes.

[Craig-and-Stephanie0]

Yes, it was confusing because AIRBNB had always paid all the taxes.  When I called  was told they were just sending this as a reminder. 

[Joan2709]

@Craig-and-Stephanie0 

I imagine they were just covering all their bases and especially were wanting to notify Hosts who had possibly opted out previously. Looks like Hosts who had opted out won't be able to do that any more. Have seen other posts like this I believe for Virginia?