TRANSIENT OCCUPANCY TAX (TOT)

Andrea4592
Level 2
California, United States

TRANSIENT OCCUPANCY TAX (TOT)

Have any hosts out there come up with a good way to collect the TOT from guests? This is such a frustrating aspect of the Air BnB platform. And very misleading. I've attached images that state my listing is covered by the automatic TOT collection service offered by AirBnB. But when you dig deeper within the Local Taxes and Laws section you can see that the TOT collection is only offered in my county (Sonoma) for UNINCORPORATED properties. This seems so arbitrary and confusing. 

 

We are located in the heart of Wine Country, a major tourist destination and a hot spot for impeccable guest relations and services. AirBnB makes the suggestion that you collect this tax fee from guests separately through the resolution center after they have paid for their booking, OR collecting it in person. While trying to do this through the resolution center may be more effective, explaining this to guests after they have already paid thousands of dollars for lodging is not a very warm welcome. And the idea of collecting in person is absolutely preposterous! The whole point is that this is AIR bnb, which to us means it's a NO HOST situation. ESPECIALLY now during covid, what host is going to show up at the door of a vacation rental and ask to be paid the TOT in person?? That's crazy! 

 

Some other hosts suggest simply building the TOT into the base price. This does not work you guys! All that does is increase the total amount that you pay taxes on. It does nothing to help COVER the taxes. You still pay out of pocket if you do not collect the taxes from your guest. 

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23 Replies 23

@Jennifer3712 

Yay!! Glad that worked!!

 

Just double check if you are required to collect sales tax as well as the TOT tax? Be sure to check on that. In some cases Airbnb will collect the sales tax, and the Host collects the custom tax. Other cases, once you add a custom tax, Airbnb will no longer collect the required sales tax and you will have to add a custom sales tax in addition to your custom TOT tax. If that is the case, you will have to then remit both the sales tax and TOT tax to the appropriate taxing authorities according to the schedules they set.

 

The Hosts I work with all pay sales tax at the state and county level in addition to the TOT. I just checked your listing and I only see the 12% TOT showing up in a reservation? If Airbnb is not collecting the sales tax for you, you would have to add that as another custom tax. They will pay you both types of taxes for each reservation and you would need to remit the taxes to the appropriate taxing authority according to their guidelines. 

 

Here is an example of how the sales tax and occupancy taxes work in a listing I consult for in Washington state (there are different county sales tax and occupancy taxes depending on the county). Airbnb collects both sales tax (state & county) as well as occupancy tax (county) for each reservation, so no need for the Host to add a custom tax. Airbnb lumps both sales tax and occupancy taxes under one lump line item called "Occupancy Taxes." This is a bit confusing for guests, as it's one total for both sales tax & occupancy tax.

 

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Right now I'm only seeing the 12% TOT tax on a reservation for your listing (not seeing any sales tax?). You can look at a previous reservation's details to see if Airbnb was collecting sales tax prior to you adding the custom TOT tax:

 

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Looks like I'm good or like your image above its rolled up into TOT tax. I'm glad you pulled up the nightly breakdown for my room. I was wondering what the price was going to be with the TOT tax.

 

 

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@Jennifer3712 

Great!  I did read on another thread that a new 15% state TOT tax will go into effect in 2025 for California?

 

https://community.withairbnb.com/t5/Help-with-your-business/California-Bill-584-just-passed-the-asse...

 

I guess I will have to wait and see how that impacts me in 2025...just a quick question. I set up 12% TOT per stay. Should i have selected per night? I just want to make sure it calculates correctly. 

Hi @Jennifer3712 

Looks fine as per stay. TOT is calculated on the total nightly rate, plus any fees. I tried a 2 night stay and appears to be calculating correctly. I would still double check yourself on new reservations just to be sure it's working properly:

 

Joan2709_0-1720653333680.png

 

 

Thank you so much for helping me figure all this out!

@Jennifer3712 

No problem! 😊

Glad you were able to get this resolved! It will be much easier now that the TOT is part of the reservation amount as it should be. I would keep an eye out just in case the county reaches an agreement with Airbnb to collect the TOT. Not sure you would be notified if they start doing that.

 

 

Paula
Community Manager
Community Manager
Port Moody, Canada

Hi @Jennifer3712, I am very glad to see that the suggestion from our experienced Host, Joan, worked for you. I would like to invite you to mark it as the best answer.

You can do this by clicking the button below the comment, as shown in the following image:

 

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Regards, 

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Please follow the Community Guidelines // Por favor consulta las Normas de la comunidad

Hi @Andrea4592 

@Jennifer3712 was able to add a TOT as a custom tax to her listing after turning on Pro Tools....scroll to the bottom to see the rest of the thread on that.