Airbnb charging wrong GRT taxes in New Mexico

Donald-and-Frank0
Level 2
New Mexico, United States

Airbnb charging wrong GRT taxes in New Mexico

AIrbnb has charges two July guests 9.24375% in taxes. The max rate in NM is 8 6875%. We are in an unincorporated part of Santa Fe County and our GRT rate, based on location, is 7.125%. I truly believe Air has no idea what they're doing. They are going to pay a lump sum amount to NM with no reconciliation. I have no idea how NM hosts are supposed to mark their quarterly returns as "paid".

 

Same situation is happening at VRBO so if you are a New Mexican host on either platform watch out!

 

Searches for New Mexico taxes of course yields nothing but info on Mexican taxes.

15 Replies 15

I noticed the same thing on my listing recently in Taos. They are charging me city tax when I am 1 mile outside of city limits on top of all the other taxes its is averaging over 10%. Total sham

Marissa80
Level 2
Santa Fe, NM

 

No, no... be sure to pull a gross earnings report, do your research because all the information you need is on airbnb.com!

 

This is the first transaction on our gross earnings report for you to review.

 

Date

Type

Confirmation Code

Start Date

Nights

Guest

Listing

Details

Reference

Currency

Amount

Paid Out

Host Fee

Cleaning Fee

Gross Earnings

Occupancy Taxes

08/01/2019

Payout

 

 

 

 

 

Transfer to •••••5254 (USD)

 

USD

 

446.01

 

 

 

 

08/01/2019

Reservation

HMAAXXxxxxx

07/31/2019

4

 

 

 

 

USD

446.01

 

13.79

0.00

459.80

32.19

 

Taxes airbnb NM.png

 

Occupancy tax collection and remittance by Airbnb in New Mexico

New Mexico State, NM

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

Gross Receipts Tax: 5.125% - 8.6875% of the listing price including any cleaning fees for reservations 30 nights and shorter. For detailed information, please visit the New Mexico Gross Receipts Overview website.

Santa Fe

Guests who book Airbnb listings that are located in Santa Fe, NM will pay the following taxes as part of their reservation:

  • Santa Fe Lodgers’ Tax: 7% of the listing price including any cleaning fee for reservations 29 nights and shorter. For detailed information, please visit the City of Santa Fe Lodgers Tax website. (link to City is broken!)

Hi Marissa,

Thank you for the input but we must be using a different Airbnb! As stated, tax rate range is 5.125 to 8.6875. (There are two areas in Taos where rate is 9.25.) However, Air has charged my guests 9.24-something and the rate for my area is 7.125%, verified by two sources. So they are overcharging my guests $3 per day. Not a huge amount but how then, can I turn around and ask guest for another 4% to satisfy Santa Fe County's Lodging Tax? Air also does not list a rate, just a tax amount. When I go into taxes, there is no place to enter a registration #. Even if there were, it wouldn't matter because Air is not providing any accounting of who, or how much, they are paying for. Just sending a big bucket of money to NM!

It's useless talking to CS reps; they haven't a clue. I've almost got Vrbo to understand they're overcharging for my locale. Once that's accomplished, I'll be after Air.

Donald-and-Frank0
Level 2
New Mexico, United States

Just an update.

Finally called Air and spoke to a supervisor because support had done NOTHING for over three weeks on the tax issue. It is, supposedly, going to be escalated. Hah! I did have success with VRBO! They agreed they were collecting the wrong amount, changed the rate they were collecting AND said they would refund the guests the overcharges. Convincing them only took about three weeks of constant emails and sending them quarterly tax filings as well as the map that shows correct rates. We have adjusted our daily rate a couple of dollars so we share with the guest, the Santa Fe County Lodging Tax 45/55.
There is light at the end of the tunnel on the idiocy train!!!

Donald-and-Frank0
Level 2
New Mexico, United States

Just an update. ABB still has not fixed the tax rate. They charged a new booking over 10%. That's over three months! They admitted they were wrong and on 9/10 said it would take a week or two! They should have had this figured out long ago. In NM, you can have a different tax rate on each side of the street.

@Donald-and-Frank0 

Sorry I have no insights to share on your particular situation, but you might find the article below interesting anyway. 

 

https://www.wired.com/story/inside-airbnbs-guerrilla-war-against-local-governments/

Donald-and-Frank0
Level 2
New Mexico, United States

Thank you Susan17,

The article was very useful especially in providing the name of the staff writer at Wired. I've let ABB know I'm going to see if I can find any media that might be interested in the sheer incompetency I've experienced.

Jennifer62
Level 4
Montclair, NJ

What do you file with your gross receipts tax return to SHOW THAT AIR BNB already collected these taxes on your behalf? I've seen that they have (and yes, they overcharged every one of my guests except one, whom they undercharged) but I truly just want to be able to show that the taxes were paid, as I was happily paying my gross receipts tax for years without their 'help'. 

 

My rates for Santa Fe lodging 7% and GRT 8.4375% City of Santa Fe, so 15.4375 

 

I just hope they're giving the extra $$ to the State. NM can use it. 

 

I'm going to call NM Tax Dept on Tuesday so I'll share what I learn. 

 

And btw ... up until this year, if you had a 3 room or smaller casita, you didn't pay city lodgers tax ... but AirBNB happily collected that as well (read new waiver language if you want to use the platform as it was clearly too hard for them to figure out the 3 room exemption). Hope they sent that money to the City.  

There may be another thread somewhere on this subject, I've been corresponding with TamiS and she recently spoke with someone in Taxation and here are the instructions she was given.

  1. Under Gross Receipts click the Add/Edit Receipts button. A window will pop up.
  2. Click on the Location - another window will pop up
  3. Enter your Gross Receipts
  4. Enter the same amount for Total Deductions
  5. Gross Receipts now is $0
  6. Click Next and finish submitting

Following these instructions, I just filed fourth quarter 2019 and amended third quarter since I had just left the tax due on that one. On fourth qtr I also had some tax to pay (pre 7/1/19) so I paid part of gross tax and excluded the rest.

 

I'm not sure ABB or VRBO are collecting lodging taxes; my understanding has been just state GRT so I would double-check on any lodging or occupancy tax you're liable for. They don't collect Santa Fe County Occupancy tax, we have to deal with that on our own. AND they no longer offer an means of collecting "other" taxes so you either have to bill guests after they've booked or eat it. We split the difference, raised rate a few dollars and we pay the difference.

I got a totally different tale from Tax and Revenue this week: that either AirBnB should be issuing me a TS-22 to file with my return, showing how much they paid or that I need to get AirBnB to tell me their CRS number (if they have NM operations) or Fed EIN (if no NM operations), which I can use to fill out the NTTC (not taxable transaction certificate) on the CRS filing site, and associate it with my account for future reference....They said I should NOT just reverse all income with deductions.   

 

Is there ANY place where AirBnB gives us a record of what they actually paid (and when) on our behalf?

 

FWIW, the sales tax they're charging our guests is just odd: in between the city and "rest of county" rate (the latter should apply).  Though it kind of looks like a possible typo error of the city rate.  They're NOT charging our guests lodging tax, which would imply they know we're not in the city.

 

Suggestions on best route for talking with someone at AirBnB about all this??

Sorry I missed this when it was posted. If you've found resolution, please ignore this response.

The little response I've had from the state/county gave me no resolution.

 

This is the response from state tax auditor. She did not respond to follow up questions.

I Quote:

"You are a marketplace seller, VRBO and Airbnb are the marketplace provider, pursuant to Section 7-9-117 NMSA 1978, if you obtain documentation from the marketplace provider indicating that the marketplace provider is registered with the department and has remitted or will remit the taxes due on the gross receipts from those transactions, you may deduct the receipts from the vocational rental.

The following are the related statutes:

7-9-117. DEDUCTION--GROSS RECEIPTS--MARKETPLACE SELLER.--  A. A marketplace seller may deduct receipts for sales, leases and licenses of tangible personal property, sales of licenses and sales of services or licenses for use of real property that are facilitated by a marketplace provider; provided that the marketplace seller obtains documentation from the marketplace provider indicating that the marketplace provider is registered with the department and has remitted or will remit the taxes due on the gross receipts from those transactions.

  1. B. The deduction provided by this section shall not apply if the marketplace provider is determined not to owe the tax due to the marketplace provider's reliance on information provided by the seller as determined pursuant to Subsection C of Section 7-9-5 NMSA 1978.

(Laws 2019, Chapter 270, Section 36)

7-9-5. PRESUMPTION OF TAXABILITY.--

  1. A marketplace provider engaging in business in this state is not liable for amounts of gross receipts tax collected incorrectly due to the marketplace provider reasonably relying on erroneous information provided by the seller.

(Laws 2019, Chapter 270, Section 28)

Thanks,

Tricia Zhang

Tax Auditor"

I am now into the seventh month of this fiasco with ABB. VRBO got it solved in less than six weeks. The "documentation" is the platforms notices that they will be collecting GRT commencing July 1, 2019.

Bottom line as far as I see it.

Rental platforms should be collecting ONLY GRT (state sales tax) and no occupancy taxes. Use the state map here http://tax.newmexico.gov/gross-receipts-tax-historic-rates.aspx to drill down to your exact physical location and it will tell you the correct GRT you should be charging/paying. This rate will/should match the rate on your quarterly filings.

 

I am at the stage, that I just rattle the cages at ABB every now and then and tell every guest that ABB is OVERCHARGING them on the taxes and tell them how much they are being cheated. Good luck.

Jim1487
Level 1
Taos, NM

I live in Taos, New Mexico. The June -July 2020 State tax rate for the Town of Taos is 8.50 % and the Lodging rate is 5.0% which totals 13.50%. AirBnB has been collecting 14.596% (or 15.047% if the calculation is made on gross minus AirBnB fees). That is over 1% more than what is mandated. I have submitted a request to AirBnB to please explain the discrepancy. Does anyone know how they calculate the tax rate they charge the guests?

Donald-and-Frank0
Level 2
New Mexico, United States

@Jim1487 Don't know how much of this thread you've read but I'll summarize my situation. We're in unincorporated Edgewood, Santa Fe County. GRT for my location is 7.125% and County lodging tax is 4%. Platforms do not collect the lodging tax; I raised our rate a couple of dollars and basically split the lodging tax with the guest. ABB takes over 8% for GRT and they include; gross rent, any fees host charges, cleaning, etc. AND their fee in the calculation. I fought them for nearly a year; sending copies of returns and the tax map showing our exact location and the correct rate. They don't care. They've picked a number within the state range and that's it! Worse still, the state does not care if they overcharge guests so long as what they collect is what they pay! I was told that twice by the fraud department. 

For what it's worth, I notify every ABB guest they are being overcharged by ABB!

Just for the record, VRBO fixed the rate they were charging within a few weeks. And a side note; I've tried to call ABB on another matter and wait time is one to two hours, VRBO is five minutes at most. It explains a lot about the difference in rates the platforms charge in fees.

Kati1644
Level 2
Santa Fe, NM

Who do you all speak with at ABB?  I just spoke with the person at Colfax County ans she says she has never received a single penny from ABB for any rentals in the Colfax County region.  

If I read the above correctly, ABB could have their own CRS number and pay on my behalf. 

Does ABB actually pay on your behalf to the state?  Or do they simply claim this but not actually follow through, thereby forcing us  to pay out of the proceeds received?