Local occupancy tax

[Michelle3518]

I am new to arbnb 3 months now . I was under the impression that arbnb took care of collecting and remitting state and local tax on the hosts behalf , the first month hosting I received a form from Warren county ky to pay my transient / short term rental tax . I reached out to arbnb and wanted to make sure that it was something that they collected from guest on our behalf . I spoke to a representative for awhile and even sent the a copy of the document i received and they assured me again that they take care of it all .
  So now after the third month in a row receiving the same letter  I called Warren county treasurer and he said that arbnb had not been sending any tax payments on my behalf .  I then contacted arbnb again and they informed that they do not collect the local tax that I have to personally collect it from the guest so now not only will I be fined by the county for late payment  I have several past reservations that I will have to submit tax payments for that were never collected  from the guest . Has anyone had an issue like ? 

[Pat271 · Accepted solution]

Yes, it’s common for Airbnb to collect some taxes, but sometimes not all taxes that the jurisdiction requires. It would be a tall order for Airbnb to learn and implement all of the local tax laws for the thousands of municipalities across the planet. It’s up to you to look it up on your tax district website, make a few phone calls, obtain and pay for licenses and permits, and whatever else is required.

You can collect the taxes that Airbnb do not remit by enabling Professional Hosting Tools, and then completing the field in the Tax section of the listing setup. Then the taxes, which are usually a percentage of the revenue, will be added as a line item on the guest’s invoice and included in the total they owe for the stay. @Michelle3518 

[Jayne262]

I did as you said @Pat271   and enabled Professional Hosting Tools, then added a 6% tax for the local county taxes.  When I got my first reservation Airbnb only collected 6%, when it should've collected 6% for the state, which they say they collect and remit, and the 6% for the local taxes that I will remit after they've collected and remitted them to me.  This is how VRBO does it and it's a very simple process.  I am not sure what went wrong, or if they just don't show the state taxes the guest paid.  I've talked to several representatives and no one has any idea what to do.  HELP!!!

[Pat271]

@Jayne262 

For my state, it shows up in the Guest charges, not the Host payout, like this:

The amount taxed by the State is collected and remitted by Airbnb ($62.06)

The local taxes are collected by Airbnb and remitted by me ($23.31).

Did you check both the host and guest invoices?

[Jayne262]

@Pat271  That's what I thought it would do but it didn't.  Could it be because I just set up the account within the past couple of days and they are still verifying my tax info?  This is exactly what I did:  I add professional hosting tools, chose "custom" tax collection option, clicked "add hotel tax" and answered all of the questions putting in 6%.   This is how it charged my first reservation.

[Pat271]

@Jayne262  I looked up Bandera County and they are supposed to be collecting Texas State Hotel Occupancy Tax of 6%, and remitting it for you. It looks like the only taxes being collected are the local taxes you set up.

Maybe you are right and it will take a month or so for your new listing to make its way through the bureaucracy.

I also found this rather old article about Bandera County in particular, and if they are still doing it this way, it looks like it takes a while for short-term rentals to be located and registered there:

https://www.banderaprophet.com/uploads/1/2/4/1/12411578/191014airbnbpdf.pdf

[Jayne262]

@Pat271  thanks for your help 🙂

[Jayne262]

@Pat271 I am curious.  Did you do the same steps I did when you set up as far as custom setting and adding only the local tax amount?

[Pat271]

@Jayne262  I think I may have found something at this page:

https://www.airbnb.com/help/article/2523#:~:text=If%20we%20already%20collect%20some,collect%20the%20....

It says there are two ways to collect taxes: Custom and Add a Tax. If you choose Custom, it will only collect the taxes you specify. I think this is why you are no longer seeing the default state tax being collected.

I think you have to choose the Add a Tax option, which will add an additional tax to those taxes already collected.

[Jayne262]

@Pat271  You can't add a tax if you don't choose custom.  How did you set up yours?  It's how I want mine to be.

[Leticia422]

To whom it may concern:  It turns out I don't have to collect (TOT) taxes from my guest. I turn off/deleted the "TAX" setting😊✔

I called a tax professional, and they could not figure it out. I walked into my county/ San Bernardion County with their TAX form filed out. Name of the form: "Uniform Transient Occupancy Tax/ TOT ) They said they did not collect Airbnb Taxes, and handed the from back to me. I called the IRS/FED too special tax team, and no one could help me out.

*Finally I called my city. Called the department that issued my ""Business License" for my room/short term renal/DBA: The Nested Garden. They informed me that I DO NOT HAVE TO CHARGE BED TAXES/(TOT)

They informed me that at the "END OF THE YEAR" the city will send me a from asking me how much I made for the year. If I made 10k, 20, 50, etc., they will tax me accordingly on the total amount I made for the year.  😁✔  The city collect the taxes off the total sales...   This is answer I received today 8/31/2021 from my city in the county of San Bernardion CA. 

I hope this helps ... this was nuts... : ) Happy Hosting! 

I called my City as talked to the department that issued me my business license DBA for my airbnb The Nested Garden. 

[Leticia422]

Forgot to mention> The city office that issued my business license did say that I could also collet the taxes if I wanted. Regardless the city will collect taxes from my gross sales at the end of the year when they mail me a form to report my yearly gains. Then I'll write them a check. 

If I don't collect taxes via the Airbnb platform  I'll then will be paying them out of my pocket at the end of the year.

Therefore, what works best for me > I'm going to split the cost and add a 3% (TOT) tax, and lower my cleaning fee. 

[Helen3]

Who told you Airbnb collected taxes in your area @Michelle3518 

As mentioned , it certainly doesn't collect taxes in every location 

Do make sure you charge visitors going forward and pay the tax you owe. 

[Jayne262]

@Helen3  I just had the customer support person, as well as another person in chat tell me that Airbnb handles ALL of my taxes.  I knew it was incorrect and they were going to research it.  It's been 15 hours and they still don't know their own business????

[Jayne262]

@Michelle3518  did you get this issued figured out?  If so please share!!!  I am having a difficult time navigating it.