new policy on collecting New York City and New York State taxes

[Jonathan2389]

Hi, as some may be aware, AirBnb has not to date collected any New York City and New York State taxes from guests who stay at an NYC airbnb.   NYC consists of the five counties of Bronx, New York (Manhattan), Queens, Kings (Brooklyn), and Richmond (Staten Island).   AirBnb does collect taxes in NY State, for some other counties.   The tax rate is about 18% in many instances for combined NYC hotel (occupancy) tax and NYS sales tax.   I have tax authority via permits from the City and Stat.   I collect tax from all guests, I pay it, and I file returns.   It may be that other NYC hosts also do this, but if not, there may potentially be millions of dollars of taxes that remain unpaid and are due to the City and State by hosts.

In an email I and other NYC hosts received from AirBnb recently, the company stated that it would begin collecting and paying NYC and NYS local taxes for reservations made after March 15th.   The email and its linked documents make clear that they will collect and pay only.   That means hosts would need to file both an NYC and an NYS tax return.  I am not sure what happens if the information supplied by AirBnb is insufficient to complete the return, or if the computation on the return does not agree with the tax paid.   A CPA would recognize how odd it is for someone to pay taxes on another person's behalf, but not to file the returns. 

There is no information in their email on opting out of the AirBnb collection and payment.  In my case, I wish to do so.   I am already obligated to pay taxes on my own.  There is also nothing in their email requesting my tax authority IDs.  Therefore, they would not be paying to the correct accounts.   A chat with support on this subject was useless.   

I am simply sending a paper letter to the AirBnb mailing address stating that I wish to opt out of the new AirBnb tax collection policy..   I will include my tax authority IDs.   I have no idea how they will react, but certainly if I do not get satisfaction, I will need to communicate with NYC and NYS.   It may interest them that 18% of host revenue in NYC airbnb's received to date might be clawed back.   That's the millions of tax due I refer to above.   There are 40,000 or so listings of airbnb's in NYC.   In 2024, the first year that they were legal under Local Law 18, suppose that each air bnb made about $10K.   That means that $400 Million in revenue was made, or that 18% of that or $72 Million is due from hosts in the way of back taxes to NYC and NYS,

Thoughts?

[Joan2709]

@Jonathan2389 

You will have to check the taxes page on your listing, I have seen it for other states, but not sure it will be available for your listing - you'll have to check. 

Usually Airbnb has worked out some sort of agreement with the State and City if they are automatically collecting and paying the tax. They do pay it in a lump sum normally, so individual listings are not reported when they pay it. This may be the easiest way for NYC & NYS to start collecting all the taxes they are owed. Otherwise, it would be a huge nightmare trying to track down and get those taxes from individual Hosts. Just a word of caution, If you opt out, be sure you are keeping meticulous records for every reservation on a spreadsheet. If you opt out, you may be able to add the tax yourself as a custom tax and have that collected and paid to you on each booking. Then you can continue to pay those as you have been, but they will be collected on each reservation instead of you having to do it yourself with the guest. You'll just have to see what you find when checking the listing.

To find out if you can opt out, you first need to turn on Professional Tools in your Account Settings.

Adding Taxes to Your Listing

https://www.airbnb.com/help/article/2523

Then go to:

Listing Editor

Click the 3 lines top right (preferences icon)

Click Taxes

Click Custom (collect and remit your own taxes)

Let us know here what you find out...might help some other Hosts in the same situation.

[Anastasia174]

Why are there taxes for 30+ days ?? It’s not a short term rental

[Joan2709]

@Anastasia174 

Airbnb's Help Article says taxes apply to any reservation 179 nights or shorter:

Occupancy Taxes - New York

https://www.airbnb.com/help/article/2319

State of New York

Guests who book Airbnb listings that are located in the State of New York will pay the following taxes as part of their reservation:

• State Sales Tax: 7-8.875% of the listing price including any cleaning fee and guest fees, for reservations 179 nights and shorter in New York City, and for reservations 89 nights and shorter outside New York City. For detailed information, visit the New York Department of Taxation and Finance website.
• New York City Hotel Unit Fee: $1.50 per night, for reservations 89 nights and shorter. For detailed information, visit the New York Department of Taxation and Finance website.

[Anastasia174]

Wow! That’s crazy ! I imagine wanting to live in another city for a few months and having to pay twice the monthly price !!! 

[Joan2709]

@Anastasia174 

The tax man always comes around eventually...actually NYC is way behind other large cities for imposing these taxes. It seems Airbnb will be providing data on Hosts at least 4x per year to NY & NYC, so they can track violations. 

The goal for taxing authorities is to generate tax revenue and supposedly improve the housing availability. 

[Anastasia174]

But what about people who need a place for a few months ! The government doesn’t think about them at all.. everyone will just rent their place with 1 year lease