My city provides TOT exemptions for government employees. How do I go about this?

[Eric8077]

It was last year sometime that my city started to implement a TOT tax (Rancho Cordova, California).  It was all pretty straightforward.  The tax is about 12% on what I'd get from Airbnb for TOT.  TOT = Transient Occupancy Tax.  There are a few exemptions to it.  One is guests who stay more than 30 days, which would therefore not be TOT, and not something I would ever do.  The other two exemptions are for government employees, either here (state, county federal) or from abroad.

I need a way to find out what guests might qualify me for this tax discount, but how do I do it?  Does Airbnb (or will they) have a way to prompt guests with a question as to whether or not they're a government employee?  If not that specifically, then is there a way I can offer a discount to government employees?  I'd be very willing to knock, for example, 5% off the base fee on my listing for government employees, which might incentive repeat customers and also notify me when they are one, in order to make it easier to do the exemption.  5% off is better than 12% taken and going to the government.

I only recently found out one of my repeat guests is a government employee and I have no idea how to find out who else is.   I can't just ask every guest.  I reached out to my city and they provided me a form to fill out for the backdated tax credit for overpaid taxes, but it's going to take me a very long time to figure this out.

Please let me know if there's a way to make this easy on me.  If Airbnb doesn't have a feature for this, please, they need to get one.

[Joan2709]

@Eric8077 

Is Airbnb collecting and paying this tax for you, or are you using the Custom Tax feature and Airbnb is paying the tax to you and you pay the City?  Some Hosts cannot add a Custom Tax and have to manually collect it from every guest.

[Eric8077]

This is not about Airbnb collecting or paying taxes.  This is about an option to ask guests if they are government employees so that I can provide an exemption to the tax.  That's what I explained in the details.

[Joan2709]

@Eric8077 

Yes...and I was trying to determine who is collecting you or Airbnb in order to help you figure out a way to do that. 

[Eric8077]

I take everything I've earned based on the monthly income report and remit that amount to the city via their payee's website.  Options in there tell me how much of that amount was charged to government employees, which can be exempted.  I enter that amount there.  So, for example, if I collect $2,000 in one month and $500 was buy a government employee who stayed a week, then I report both those numbers to the government, then they generate what I owe in TOT tax, which is 12% off that $1,500, so $180.  If I didn't mention the government employee, I would have paid 12% on the $2,000, which would be $220 and overpaid by $40.  I have over a year of this stuff to calculate, but I all I know for sure if one repeat guest who is a government employee.  For everyone else, it would seem inappropriate to contact them.  I can look on their profile or the past message and go by that if they say they work for the government.  This will be very cumbersome.  And, once I do finish this, going from here forward, I will need to keep logs.  I would like a way to offer discounts to government employees when they request the booking, for the discount to be immediately applied in the request, so I might then approve it.

[Lorna170]

@Eric8077   You are missing the point that @Joan2709 is trying to make.  

When a person books your property, they are charged taxes.  Does AIRBNB COLLECT the taxes and pay them to the tax authority or are the taxes charged to the guest PAID TO YOU and YOU REMIT to your tax authority?  

If YOU are receiving the TOT that is being charged to your guests, then YES, you should find out which guests are due a refund/return of those fees.  You could leave a note in your property or guest book requesting that Government Employees requiring a return of the TOT message you via their government email address. I was a government employee and had to send my EDU email address to vendors to receive discounts or tax refunds for certain types of purchases.  This should be sufficient.

If AirBnB collects and pays the TOT on your behalf (which is a lump sum and has no association with your personal tax ID) and a guest was exempt from those taxes, they would have to get the money back from AirBnB.  

[Eric8077]

I don't understand what's not clear.  It's not the guest who gets a discount for this.  It's me who gets the discount in a sense when I don't have to pay taxes to the city.  It is me, the host, who pays taxes from the funds I get from Airbnb, not Airbnb that remits the taxes.  There is no incentive for the guest to mention they are a government employee unless I make the incentive by offering a small discount.  Since 12% of the money I receive I have to then pay to the city, I can offer government employees, say, a 5% discount.  They save money and so do I.  It's a win/win.

There is otherwise no way to streamline this, but another answer did make me think of a workaround.  I can simply offer a 5% refund to guests who are government employees.  This will be taken out of the money I receive from Airbnb.

For example, out of $100 I get from Airbnb for a guest's stay, $12 would go to my city government, leaving me with $88.  But, if I refund 5% to government employees, I instead get $95 and nothing goes to the government.  This way, I get to keep $7 more than a non-government employee stay.

[Cambria-Vacation-Rentals0 · Accepted solution]

Hi Eric,

Yep, we have the same lovely TOT here in Cambria, CA.  I had no idea of the government employee discount/exemption. If I'm understanding this correctly, it sounds to me like it would be up to the individual to offer that information. Like a service animal, you won't know unless they tell you, and they always do. I would put a sentence in your policies, and anywhere it might make sense to put it, that "if you are a government employee, please make this known to the host, as you may be exempt to the 12% tax).

Heidi

Cambria Vacation Rentals, CA.

[Eric8077]

It's not the guest who benefits as they have to pay tax.  It's the host.  I imagine that's what you mean.  I do wish we had the ability to ask the question.  However, I can put it on my listing to mention whether or not a guest is a government employing when putting in a request to stay.  The problem with this is that they can't put in a reservation request, but have to instead but in an inquiry, that I must counter with an offer.

Guests don't usually like this as inquiries are not requests and someone else can put in a booking request that overrides any prior inquiries and then ties up the reservation.  There are issues with this. 

But, you do give me an idea.  I can offer a 5% refund to guests who are government employees, which would just be sending the guest money via the app.  This way, they will have the incentive to mention whether they're government employees and can just put in the request to reserve.  This seems like the only reasonable workaround at this time and it's not ideal, but may work.

[Eric8077]

Your city also doesn't necessarily offer the discount, but you can check.  Definitely verify it.  Don't want that tax collector at your door.