Massachusetts New Guest Tax???

[Ken-and-Kathleen0]

AirBnB collects and remits taxes in 40+ states, PR and the US Virgin Islands, but for some reason, the tax they were a proponent of in Massachusetts is not even mentioned.

There have been no updates by AirBnB on how they are going to help their hosts handle this tax which according to the State information includes all fees cleaning, and service (AirBnB Service Fee?) and the Security Deposit.

The bulk of Massachusetts AirBnB revenue in Massachusetts would have to come from Summer Rentals in places like the Cape, Martha's Vineyard, Nantucket and the Berkshires. 

Without some sort of resolution, or at least notice from AirBnB we're faced with either eating the tax, reporting costs, etc. or just cancelling all of our summer reservations. 

[Beazie0]

Does anyone know how/where in my listing I add my certificate number?  

[John47]

@Beazie0 
Given the past slowness in implementation by ABNB, and that it's not required until Nov 1, I would suspect that they're not yet ready for it.  I would look again around mid-Oct and see if any thing has occurred.

[Jack363]

Although Airbnb says that they are collecting and remitting taxes in MA, they are NOT. You will be liable for paying out 14.95% (Boston) of earned income paid since July 1st. 

[John47]

@Jack363 
1) YES, they ARE collecting and remitting STR tax in MA - maybe yours isn't being done correctly but others are - so don't generalize when you don't know that to be true.
2) Hosts will NOT be liable for any uncollected tax on Airbnb rentals - only Airbnb is - that comes directly from the DOR person in charge of implementing it.
3) In any case, hosts are UNABLE to compute correct tax since they do not (except in Special Offer) know the amount of booking fee paid by guest.
4) Remember that hosts that meet the definition of a "B&B home" (1-3 rooms in owner occupied building and breakfast provided) are EXEMPT from this tax - maybe you're one of those?

If you've read these threads, you'll see the email from Jen @DOR supporting my item #2. 

Update/Addendum: I just went to your listing and put in a sample dates of 11/04 - 11/07 and it shows breakdown of $894 ($298 x 3n) + $115 fee + $151 tax (Accomodations tax: Boston + MA; Lodging tax Boston) for total of $1160. So it's showing me that it will collect taxes of 14.95%, ok?

[Susie5]

@John47 @Jack363  I thought they were collecting and remitting it too, but when I went to the Mass DOR website I saw little red flags where no filings have been made for my unit, despite my having been registered for a few months now.  John, why are you sure they are collecting and remitting the tax? Can you see it on your MassConnect site?

[John47]

@Susie5 
There will be NO reference to taxes collected on our behalf on MassConnect because they are being grouped together for all units in a given town/city by Airbnb and we won't ever see that info, AFAIK.
And even if they haven't correctly collected/remitted it, it's NOT any of our responsibility to do so or to verify that it's right.
You only need to worry about rents that you collected directly from guests.

Addendum: And without the registration number on Airbnb (which was just recently added as new option), there's no direct linkage to our listings.

[Jack363]

I'm not sure where John is getting his information. According to a supervisor at Mass DOT the owner is the responsible person Mass DOT will recover taxes from.  Ultimately the owner is responsible.  Airbnb is responsible for paying its portion only. John please provide where your info comes from

[John47]

@Jack363 
I am getting my info directly from the Session 337 law, and DOR site -and- Jen Desimone who's the person in charge of this implementation.
The owner is ONLY responsible for taxes on rents paid DIRECTLY to them. If rent is paid via an intermediary (Airbnb, VRBO, realtor, etc), THEY are the ones responsible. It's extremely clear that's the case.
And in Jen's email to me of July 5, she wrote:
"The intermediary ultimately are the ones responsible for the taxes collected and reported, not the hosts.  I will let our legal folks know about this and see about reaching out to Airbnb but again.  This is probably going to take some time for everyone to settle in.

Jen"

[John47]

@Jack363 
And in the email that I got from DOR on Oct 8, (which you should have gotten as well):
Please Note:
When an intermediary collects rent for you, along with the appropriate taxes and fees, they are responsible for filing returns and making payments for those transactions. That information will be reflected in their MassTaxConnect account, but will not be reflected in yours. However, the intermediary is required to provide operators with information that details the amount of rent, taxes and fees they have collected and remitted to the Department. An operator will not be liable for the failure of an intermediary to collect and remit the proper amount of taxes and fees to the Department of Revenue on rents collected by the Intermediary unless the operator provided the intermediary with inaccurate information about the rental.

[Jack363]

Thank John! I have not received that email and dont understand getting poor info over the phone from DOT! But appreciate giving the written communication from them!

[John47]

@Jack363 
The other significant paragraph from that email is:

If you are working with an intermediary to book your rental property(ies) for you, and to collect the rent, you will need to provide the intermediary with the certificate number you received when registering with MassTaxConnect as an operator of short-term rentals.  This will alert the intermediary that you are properly registered with the Department of Revenue and will assist in the accurate distribution of the taxes collected to localities and special funds. Some intermediaries have updated their systems and are ready to accept certificates from operators now. Others are not quite ready and report that they expect that their systems will be updated and ready to accept certificates soon.

The part that I see as still an issue is the 14 day exemption threshold because it could in some rare cases, take most of the year to determine if total days were less than that and thus exempt or more and now taxable.

As to getting bad info: That's why I have only relied on Jen's info as she's the point person for the whole thing. I think both DOR and Airbnb have deficiencies in getting right info to all cust serv people, and it's a VERY complicated law in some ways.

[Nora690]

How does one sign up to get emails like the one you got from DOR?

[John47]

@Nora690 
You maybe responded here instead of the other thread that was discussing the exemption but in any case:

1) My presumption is that I got that email because i was already registered...

2) No, there's been NO explicit written references to breakfast or entrances. And i was only giving MY view of what I see as  the intent of the law which was to carry forward from existing law a prior exemption for those defined a 'B&B Home' and which existed before Airbnb began. Back then, i doubt any consumer would have considered it to be other than a multi-bedroom home where a bedroom or two was rented out with a breakfast served by host and a common entrance. 

I think that there will be hosts who have properties that are not of that type who will use this exemption unfairly to avoid taxes and get more guests and that bothers me as someone subject to tax so I'm trying to get clarification from DOR and possibly lawmakers as to how they plan to handle this potential gap in the law/regs.

Addendum/Update: Suppose a listing was for a guest suite above a garage with a living room, bedroom, bath & kitchenette, and separate entrances from main house. Would that be what comes to your mind when the "B&B home" term is used? It certainly doesn't to me and that's the type listing that I see as needing to be registered/taxed to "level the playing field" as bill proponents wanted.

[Nora690]

I confirmed with Jen at DOR as you suggested (thanks). You are right about the intent. She speculated that the exemption might be removed in the near future and the lawmakers might just have forgotten to remove it, so you might want to be less bothered about the unfairness. 🙂

She confirmed that there is no expectation of the specific nature of the breakfast or entrances as there are none noted in the law. If host advertises breakfast and guest accepts that as a breakfast, no one cares. A private entrance by itself isn't a problem, so in-law suites won't be a problem. I would think a kitchenette by itself in a guest suite also wouldn't make it problematic. But a separate legal apartment in a multi-family would be problematic. So what matters is if it is  legally a single-family (including apartments) or multi-family residence for the purposes of satisfying the "owner-occupied" criterion; the former does and the latter doesn't.

(Am just the messenger here.)

[John47]

@Nora690 
I had been in touch with Jen late last week re the breakfast thingy but not much about entrances. She had agreed there was no definition of breakfast (which I found unusual) but going back to pre-Airbnb days, while I never used one, I can't think of any "B&B" that didn't have some sort of shared breakfast like a hotel/motel would. In-room coffee, yes...but cereal and such in your room, nope.

And - to me, the "1-3 rooms" is also a problematic clause as does that mean only a bedroom, or bedroom w private bath, or an entire suite with kitchenette, etc? How many actual rooms can "1 room" consist of?

As the hotel industry was part of the proponents, I would suspect they would want ANY accommodation no matter the size to be taxed, unless it was maybe a hostel setup where you didn't even get a private room so nothing that a hotel would ever offer.

Thanks for your input to this and the relayed info!