Taxes withheld

[Barbara-and-Owen0]

I am a calm and rational guy, but I am absolutely frustrated beyond belief with AirBnb's inability to answer a simple question.

Each quarter, we are required to pay 5% occupancy tax (based on gross receipts) to our county tax office. In the past, this 5% was collected and paid to us at booking, based on our request to withhold that 5%. Starting on October 1, however, AirBnb started withholding both county occupancy tax and Virginia sales tax, and then remitting the taxes on our behalf.

We still have to file the form each quarter at our county tax office and pay the 5%, but we get credit for what AirBnb submits for us. (We need to pay the 5% for non AirBnb bookings ourselves.) Our local tax office requires proof of what AirBnb submitted, but I didn't think this would be a problem, because on our downloaded transactions page, we can see the total tax withheld each booking.

However .... AirBnb does not break down the taxes paid to each entity, so I don't know how much of the tax they paid our county and how much went to the state. After numerous phone calls and even more emails, I still cannot get the answer to this question. It even got escalated to a team that does such things, and their final response is that they just don't know and say there is no one else to ask. How can this be? Someone has to program their software to know how much to charge our guests at booking! Why can't they just look that up? Someone has to pay the check to our county. Why can't they just look that up?

EVERY SINGLE TIME I ASK, I get put on hold while they "do the research", only to come back and tell me that Virginia policy for occupancy tax for counties says the rate is somewhere between 3 and 7 percent and that state sales tax is in some other range. They also always tell me to look at the transaction page to see how much was withheld. But they can't tell me what the occupancy tax rate is for MY county and they can't tell me our state sales tax rate. And they can't tell me how much they actually paid in dollars to each of those two entities.

I tell them that I know the rates. They are 5% for the county occupancy tax and 5.3%. However, they are withholding about 12%, which is too much. Where is that extra tax money going?

I've literally spent hours trying to get this information. I finally got the bright idea to just ask my county tax office how much was remitted on my behalf. I couldn't believe it when they said they had no idea. They said that they get one check monthly from AirBnb which is the total tax collected for all AirBnb hosts in our county, but they don't know how much is collected for each individual host! This is why they want us to submit proof on what was submitted on our behalf. Our county office is just as frustrated as I am.

Everyone at AirBnb has been friendly and says they understand my frustration. In the end, though, the final response is always the same: "I don't know." No one on the phone can talk about it now, either, because it has been put into escalation. But the escalation group only conducts its discussion via email, which is very slow, and still ends with "We don't know."

I'd be happy for a suggestion on what to do so I can (1) comply with my county tax laws and (2) know why they are charging too much tax for my guests.

[Mike-And-Jane0]

@Barbara-and-Owen0 I would start at the other end and ask your state/county what agreement they have made with Airbnb. It seems that in most places Airbnb just remits one amount and doesn't break it down. If however that is what the state/county have agreed then there is no way you will get a breakdown. 

[Fred13]

I am sure that the last thing Airbnb wants to get involved with is withholding taxes and then having to figure that of 100 million separate bookings and then have to follow the different rates and rules of thousands upon thousands of different lazy municipalities of the U.S.

The one Airbnb collective check thing was probably a compromise after a food fight of how much Airbnb was compelled to do (collect taxes) to be allowed to operate in a given area. It is not done this way in many other places or countries, for good reasons.

Me, I would take an educated guess, and not worry about it till further notice, because if the big. bad IRS ever wants to audit me, I will send them to prove their case and then they will have to go through the same hassle you are now going through.

[Barbara-and-Owen0]

Yes, I have come to that conclusion, and I should be able to comply with our county requirement.     The one part I am left with is wondering why they are withholding 12% when the total should be 10.3%.   Why can't they explain this to me?   Our guests are being charged too much tax, but there doesn't seem to be anyone to talk to about it at AirBnb.

[Fred13]

Aye, the 12% vs. 10.5% makes no sense at all.

[Peggy-And-Mike0]

Wow, I feel your pain. It's the same for us in Georgia, but my county tax office isn't asking me to prove what Airbnb paid them...and how could I? We don't write the check. And as for getting anyone to work with you to lower the taxes...I can't see why they would, it's not in their best interest. State/county likes the $$$$. The only consolation is that everyone else is getting overcharged as they can't be singling out your property alone. I don't mean to sound like it's not a stoooopid situation, but this is one that I'd not spend any more energy on if it were me. Just tell the county it's impossible and that if someone else is providing that detail then ask them to connect you. 

[Lorna170]

@Barbara-and-Owen0  When I look at the tax listing on AirBnB for my property, it shows three tax departments that are being paid (ostensibly) by AirBnB.  No, there is no amount or percentage listed next to each department, but it was easy enough to go to the State, County and municipal tax pages and discover what the collected percentages are.  (P.S. VRBO does show the percentages listed next to each tax being paid.)

In my case - State is 4.75%, County is 2.25% and Municipality is 6%, for a total of 13%.  The taxes have names like Sales and Use and Accommodation (Hotel) taxes.

I then do a reverse calculation on the amount of taxes collected from the guest, and as long as I include the AirBnB service fee as well as the 3% charge for credit card payments as the gross amount taxes are being assessed on, I do see that AirBnB is collecting the 13%.  

If AirBnB is collecting an overage, have you perhaps missed a tax department?  Or are you not including the Service fee and the 3% charge when you verify the tax amount?

AirBnB is NOT transparent -- which is certainly an issue that they should resolve.