Occupancy Tax

[Devon172]

Has anyone figured out how Air BNB collects and remits state and county taxes?  I'm getting one lump sum and can't figure out how much is going to state and how much is going to county.  The state is 6% and county 3%, but air bnb is collecting 9.8%.  I can't figure out where the other 8% is going or prove to the county/state that they have been paid.    Is it easier to just to custom tax and pay them myself?

[Joan2709]

Hi @Devon172 

I can only see a total of 9% on Airbnb for your location (State 6% and Carbon County 3%) as well?

Occupancy tax collection and remittance by Airbnb in Pennsylvania

https://www.airbnb.com/help/article/2325#:~:text=Carbon%20County%20Hotel%20Room%20Tax,the%20Carbon%2....

You can start by viewing what jurisdictions Airbnb is collecting for (they don't tell you the percentages unfortunately). That will clue you in as to whom they are collecting for:

Got to Listing Editor

Click Preferences Icon at top right

Click Taxes

Please let us know here what your listing shows as to what tax jurisdictions are listed as collected by Airbnb.

[Devon172]

It should be 9% (6% for PA and 3% for Carbon county) total but when I calculate it, it is 9.8%.  That is my confusion. I am using the amount on the earnings report after the service fee. (Its even more if I use the amount before the service fee but I don't think that is included.) The numbers don't work.  For example, in May, I had one rental and the amount of the payout after service fee was deducted was $479.57.  9% of that is $43.16 but they collected $48.68.  Where is the rest going?

[Joan2709]

Hi @Devon172 

Can you post a screen shot of the tax section on your listing so I can see what it shows?

[Devon172]

sorry I was away yesterday but after reading your messages I did the calculations adding in the tax on the air bnb guest service fee and the numbers match up.  Thank you for your response.  No one else has been able to explain this.  Now I can do my sales/occupancy taxes knowing the correct amounts.  THANK YOU again!!  

[Joan2709 · Accepted solution]

Hi @Devon172 

This is a bit complicated, but I believe this could be your answer? Maybe another Host in Carbon County, PA can verify...

Occupancy Taxes are usually paid only on the nightly rate plus any fees (excluding the Airbnb Svc Fee). Looks like State of Pennsylvania charges both the Host (operator) AND Airbnb (booking agent) a 6% fee. Carbon County charges 3% HOT.

I think this is how they are calculating it. You can review the State’s explanation of how they charge the 6% HOT on both you as Host on the nightly rate and cleaning fee AND 6% charge to Airbnb on the Guest Service Fee only. This is a bit unusual. Most states only charge the Host the HOT. If the state applies sales tax, it would apply to nightly rate, fees and Airbnb Guest Service Fee. You’ll have to read thru the info in the link below and then confirm this with Airbnb to be sure:

https://www.revenue.pa.gov/TaxTypes/SUT/Pages/Hotel-Occupancy-Tax-Booking-Agents.aspx

Sample Transaction

A customer books a hotel room for one night through a booking agent for a discounted room charge of $100.00. The booking agent charges a $20.00 accommodation fee for providing the service. The booking agent bills the customer as follows:

Discount Room Charge	$100.00
Accommodation Fee	+$20.00
Total Rent Charge	$120.00
6% PA Hotel Occupancy Tax	+ $7.20
Total Amount Due	$127.20

1. The Operator remits $6.00 (.06 tax rate X $100.00 Discount Room Charge) to the PA Department of Revenue under his/her Sales, Use and Hotel Occupancy Tax License.
2. The Booking Agent remits $1.20 (.06 tax rate X $20.00 Accommodation Fee) to the PA Department of Revenue under his/her Booking Agent License.

• The Booking Agent must also file a tax return under his/her Sales, Use and Hotel Occupancy Tax License claiming a Taxes Paid-Property Resold ("TPPR") credit on the myPATH return for any amount of tax paid to the operator and remitted to the department by the operator.
• In instances where the booking agent collects the tax from unlicensed hotels (e.g. private homeowners), the tax on the discount room charge is remitted and reported under his/her Sales, Use and Hotel Occupancy Tax License, and the tax on the accommodation fee is remitted under his/her Booking Agent License.

Example Reservation

Nightly Rate + Fees (cleaning fee) = $639.20

$639.20 x 9% (combined state/county HOT) = $57.528 round up $57.53

Airbnb Svc Fee $90.24 x 6% = $5.41

$5.41 + $57.528=$62.94

[Devon172]

Thank you for this explanation. I will review the info on the link you provided.  This looks like it could be the answer I was looking for on why the amount is more than 9%. Thank you for your time!!

[Joan2709]

@Devon172 

No worries 😊

I did look at another listing in your area and the calculation was the same on their listing.

[Devon172]

yes I did the calculations for May and Jun and they numbers work when I add in the tax on the guest service fee for air bnb.  Thank you.

[Joan2709]

@Devon172 

I think this is a "creative" way for states to collect more tax revenue if they don't have a state-wide sales tax on STRs. Always an angle to generate more revenue.

It would be helpful if Airbnb added this explanation to the Occupancy Tax Section for Pennsylvania to prevent other Hosts from having the same issue as you when calculating taxes on reservations. 

For the Hosts I consult for, there is a state-wide sales tax and therefore that is applied to nightly rate, fees AND the Airbnb Guest Fee. The Occupancy Tax is then only applied to the nightly rate and other fees like the cleaning fee.