Lodging and Use Tax Montana calculated wrong

[Stacy87]

Is anyone else noticing that Airbnb is overtaxing MT occupancy tax?  Tax is 7% but they charged my guests 7.4% including cleaning service fees which are not taxable.  I also can not recalculate the base amount that the tax is based on, is there a formula somewhere that shows us what is being taxed?  Also, how are other Montana hosts reporting this on your Quarterly tax filings?  I use both VRBO and AirBNB, but remit the VRBO taxes.  In addition, I need to remit Pre-June 2018 reservation taxes.  Any insight would be helpful.

[Stacy87]

I received the following note back from the state of Montana on how "not" to report AirBNB Montana rentals on your LFT form:

"If you have arrangements with AirBnB to take reserations on your behalf, you do not need to report anything for those bookings.  If you handle any reserations on your own or through some other reservation platform (like VRBO), you are required to report those transactions."  

Hope this helps others who may have wondered how to report AirBNB rentals where they collect and remit the lodging tax. 

Still does not answer how AirBnB is calculating the taxes they are charging.  On rent alone, it is close to 8.5% and including housekeeping fees, 7.5%, still higher than the 7% required.  No resort fees apply to my  community.  

[Saul32]

Hi Stacy,

Thanks for the information above!  We weren't sure how to report Airbnb rentals on the LFT form for Montana so it was very helpful.  

According to the following article, it looks like Airbnb applies the 4% lodging facility use tax to the listing price as well as cleaning fees, and the 3% lodging sales tax to cleaning and guest fees:

https://www.airbnb.com/help/article/2314/occupancy-tax-collection-and-remittance-by-airbnb-in-montan...

The Montana Department of Revenue's website also seems to indicate these taxes do in fact apply to cleaning fees. 

Hope this helps in making sense of the higher percentages you're seeing for your rentals.

[Diane744]

I don’t charge for cleaning how come some of my guests get charge for cleaning