Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2
280 Views

Has anyone had issues with Airbnb collecting state occupancy taxes from guests and not actually paying them to the state? I received a notice from the state despite providing Airbnb with all of my tax information that the state had not received my occupancy taxes which Airbnb claims to have been collecting. Where has that money gone? Of course no way to speak with a knowledgeable rep at Airbnb only robots and instant message exchanges which lead nowhere. I am now being charged a penalty from the state for late payments. 

15 Replies

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
Oregon City, OR
Level 10

@Kimberly718 First, providing your taxpayer identification information to Airbnb has nothing to do with occupancy taxes. That's about reporting for your federal/state income taxes. 

 

Airbnb collects and remits occupancy taxes in some localities but not others. Where it does, it does not report/remit them on individual hosts' accounts. It appears that Airbnb does collect/remit Connecticut state lodging taxes, so it's baffling that the state would send you such a notice. Is it actually about state taxes, or some local (e.g. county or city) tax that Airbnb does not collect?

 

In your shoes I would find a local CPA with Airbnb knowledge, and/or call the tax authority that issued the notice to try to understand it.

 

https://www.airbnb.com/help/article/2299/occupancy-tax-collection-and-remittance-by-airbnb-in-connec...

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2

Airbnb does collect Occupancy taxes (all are listed in my gross income) and have been collecting them on my behalf, they just haven't paid them under my business to the state of Connecticut. I am not sure what they are doing with the money they have collected. I have read all of the articles but nothing in those article or under account information has a record of what they have remitted to the state on my business's behalf. I have called the state tax authority they said to contact Airbnb, which I did but got stuck in a loop. Waiting to hear back from them but in the meantime wanted to see if anyone else was having an issue with this. I am happy to collect those taxes on my own which I will plan to do moving forward as it seems Airbnb may be having issues with paying the money they collected. 

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
Oregon City, OR
Level 10

@Kimberly718 I don't think they would ever pay them "under your business" and I don't think there is ever any way to get a report/record of money specifically paid on your behalf. Airbnb pays to the taxing authority in a lump sum on its own behalf. At least in my locations, they pay for everyone (based on listing address) or no-one.

 

FWIW, I have found it useful to have a CPA who is familiar with Airbnb and knows who to talk to at the taxing authorities.

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2

Lisa, They most certainly should and indicate that they have collected them from my guests and will pay on my behalf. It would be idiotic for them to pay the state in one lump sum not associated to any particular account. Screen Shot 2021-11-29 at 6.42.28 PM.png See image attached. This would indicate that they collect and remit on my behalf. Thanks anyway but Mark answered below what I feared was the case. Money has been lost in the shuffle and looks like I will now have to pay out money that I didn't collect from my guests.  

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
Oregon City, OR
Level 10

@Kimberly718 Yes, I'm familiar with the image. Remitted "on your behalf" does not mean that it's submitted to the tax authority as an individual amount in your name. Whether you view it as idiotic or not, lump sum payment is what they do, in Oregon and Washington, at least. When our CPA files our lodging tax returns, she reports our gross revenue and credits the taxes they remit as "collected by facilitator".  Airbnb remits Oregon state lodging tax, but not our county tax; and they remit Washington state lodging tax, but not a (different) state sales tax, and not our county tax. It was impossible to figure any of this out from Airbnb itself.

 

Of course you can just assume Airbnb pocketed the money and pay up. Personally, I'd pursue it with a knowledgable CPA before reaching that conclusion.

 

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

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2

I am not referring to county of local taxes only state. For the state of CT they only collect state occupancy tax in the amount of 15% and Airbnb specifically asked for my state permit/regis number so that tax should be assigned specifically to my business not paid in a lump sum to the state and  "paid on your behalf" most certainly does imply as does the outline in the tax section indicate that it is paid to "certain jurisdictions" in my case the state of Connecticut specifically to my regis/permit number not in a lump sum. I am happy to collect it on my own moving forward so I know it will absolutely be paid on time. In the meantime I will keep hunting down where they went with my $2000 in collected taxes. Ugh. 

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2

Screen Shot 2021-11-29 at 6.42.28 PM.png

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
Jersey City, NJ
Level 10

@Kimberly718  Yes.  My city says that Airbnb collected the city occupancy tax from guests but stopped sending it to them.  In order to get our permit renewed we had to pay it ourselves.  I could never get a straight answer from Airbnb on this.

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2

Thank you Mark. That is helpful and what I feared. I am new to Airbnb so was thrilled to see they offered to pay occupancy taxes as they collected over $2000 but then has yet to pay anything to the state. I don't even know how to get them to stop collecting the taxes which they appear to have pocketed. 

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
La Quinta, CA
Level 10

As @Lisa723 posted, it is also my understanding that Air BNB does not link the individual payment to whatever is the taxing entity.  My city pulled out of the agreement with Air BNB for that reason.  The agreement is between Air BNB and the taxing agency, therefore, if the taxing agency is not getting proper payment, then they should not be in such an agreement with Air BNB.  That hosts are reporting the taxing agency, whether state, county or city is going after the host is very troubling, but may represent a communication problem within the taxing agency, not a failure of Air BNB to pay under the terms of the agreement.  If you have a record of the collection/payment per the Air BNB system, I would think you have a case against the state, not Air BNB.  What motivated taxing agencies to enter into the type of agreement with Air BNB was the agency's belief that many hosts were not reporting booking income and paying the occupancy taxes.  The problem is there is no way to audit a lump sum payment.

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
Oregon City, OR
Level 10

@Linda108 yep-- taxing authorities made deals with Airbnb to pay the taxes but not link to (or report) individual hosts-- this makes it harder for the authorities to use the tax info for license enforcement etc., which they accepted as a cost of getting better tax compliance.

 

However, I know that the agreements vary widely by jurisdiction, and have not been reported accurately or well, so I can't say anything absolute about any other than my own.

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2

Thanks Linda, good info. I am awaiting a call back from Airbnb. I do of course have a full record of what was collected by Airbnb just trying to understand how they are paying state occupancy taxes. Seems odd they would request state registration numbers and then send in a lump of money without specific allocation to a tax ID. I will share once I hear from them and get to the bottom of this. 

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
Pāhoa, HI
Level 8

It seems the collecting of taxes and remitting them to the government or to the host depends on one of two things: 1) Does the government require Airbnb to remit taxes to them, and/or 2) how much revenue does a host earn annually from Airbnb.  I can easily see that Airbnb collects the two Hawaii taxes that we have programmed, and we receive the taxes in our payout for each guest.

 

Am I missing something?

Re: Airbnb collecting State Occupancy Taxes but not paying to the state

in
North Stonington, CT
Level 2

It differs from state to state. My question was really more about the wording that Airbnb has under the tax section which the agent I corresponded with did agree was nebulous "we collect occupancy taxes and remit them on your behalf". My Inn is in CT and is a state that charges an occupancy tax. What happened is that many Airbnb owners are simply homeowners trying to make some extra money and not necessarily professional hosts so occupancy taxes were not being collected and paid to the states. With a surge in Airbnb's and decline in hotel bookings states were not seeing the revenue as they had via the collection of occupancy taxes, that said Airbnb now collects and remits in one lump sum as Lisa indicated. The problem is that the wording they have doesn't clearly indicate that which it should. I called my state tax revenue rep and he said to simply file monthly as $0. 

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