Massachusetts TAX EXEMPTION???

[Susan241]

AIRBNB Customer Service is useless. 

Their explanation of taxes is more useless 

can anyone give a short, and accurate answer to my question. 

I rent a room, max 2 people, July and August. I live in the house and serve breakfast.  

Will AIRBNB take taxes from my rate?

if they do and I’m exempt from taxes ...how do I tell them not to?

Thank you!

[Chase68]

Hello everyone.  I've just gotten off the phone with the DOR and was told directly that if you are a B&B Home, you should NOT register as an operator at all.  If you do, there is no option for B&B Home and the system will think you need to collect taxes.  Somewhere in these threads someone claimed there was a pull down menu on the MassTaxConnect site that allowed you to select B&B Home.  This is NOT TRUE.  However, ABB is now the problem.  They are currently adding taxes to my listing and sending me constant warnings to register as an operator with MA before Nov 1 or my listing will be taken down.  I've tried support chat, which was a comedy of circular reasoning as to why they could not answer my question, and now spoke to them on the phone.  Currently awaiting an email that may have instructions on to how to set how ABB handles taxes for my listing, however she already warned me it may not work.  If it doesn't, she said she'd kick it up a level.  On a higher level, what is ABB going to do with the taxes they erroneously collected from my guests so far?  I can't be the only one in this situation, so I think ABB is looking at some bad exposure here.  Class action suit potential, IMHO.  

[Anne226]

@Chase68 I checked several MA “b&b home” listings today and taxes are finally excluded. Airbnb has corrected their interface so guests are no longer being taxed. 

[Chase68]

Can you give me an example?  Can't find any and no way I can find to tell ABB that I qualify too.  

[Anne226]

@Chase68, sure. Perform a search on your area Sunderland, MA. Use filters to select “private room” and “Bed and Breakfast” as property type. Results will show Airbnb’s that are exempt from taxes. These homes are most likely owner occupied with shared spaces and private rooms. 

[John47]

@Anne226  and @Chase68 
It's my understanding that at some point, DOR will be examining those Airbnb listings that have defined themselves as 'B&B home' to see if they meet the criteria and if they don't, back taxes would be due, and from the host (even if host never collected tax from guest and NOT from Airbnb because they were also being misled) because they don't want folks who should be taxed to be avoiding them. 
Just a caution to those who might see this as a way to bypass the STR tax, ok? I'm NOT saying either of you would do so, but since y'all were involved in discussion...

[Nora690]

Is there any other requirement to obtain a state license (not registration) to qualify as a "bed and breakfast home" in MA?

Do cities (as opposed to the state) typically have a licensing requirement for B&B homes? I am wondering about Cambridge, MA in particular.

Listing a property as a B&B on Airbnb triggers a request for verifying the business TIN number, so it looks like Airbnb assumes that a "B&B home" is a business. Is this consistent with others on this forum observe?

[Molly168]

@Nora690 @Chase68   curious what folks are doing about this.  I feel stuck in limbo: knowing I don't need to register as an operator since my space meets the definition of "home B&B" but taxes have been applied to all bookings since July.  I emailed Jennifer at DOR again who has been helpful/patient with questions in the past and she simply suggested changing my listing (currently listed as an "entire space" since it does have it's own entrance as well as a common entrance/egress) to a "Bed and Breakfast" since this is the only Airbnb option to avoid having guests taxed.  However, as others have mentioned, I don't think this is a good solution since my space is not what people are looking for when searching for a true B&B and I think a) my bookings will drop drastically (suspect not many people search using the B&B field, and b) my ratings will go down as folks who actually want a B&B experience will be disappointed to find it's simply a room with continental breakfast provided.  Are you all planning to switch your listing to the "B&B" category?  My understanding is that as of right now, that's the only way Airbnb recognizes the state's "Home B&B" tax exemption.  Also curious about Nora's question about business license/TIN requirement and if it's actually required for a "Home B&B".

[Chase68]

Yea, Jennifer was super helpful with me.  Between us we beat on ABB with emails to finally get them to activate the B&B tax exemption.  However, you are correct that the only way is to set your space as a B&B.  I instead tried to have my title and description compensate for this, but I agree that it's a risk with potential bookings.  

I was told, categorically, by the DOR that I should NOT register with Mass TaxConnect and get a registration number.  

However, I did go down the other rabbit hole of insurance.  Liberty was my savior, and since they are MA local I bundled all my insurance (car, homeowners, liability, etc) and ended up saving a few hundred and being 100% covered for ABB activity.  

[John47]

@Chase68 
I would just keep in mind that, while you don't technically need to register with DOR for Airbnb rentals, should you ever want to do one/more rentals  privately/directly, such as for a known repeat guest, you  HAVE to be registered for that. And given that you only need to file a return when YOU collect rent, it's not any additional overhead on you for your normal guests.

[Molly168]

Thanks Chase.  Good info.  I guess I need to change my listing asap.  And call Liberty.  Sounds like a miserable day of adulting ahead of me. 

[Kathleen126]

Need to jump in here and hopefully get some clarification.  We have always been a B&B listing on ABNB. Nevertheless, our guests last summer after July were assessed the occupancy tax.  Am I to understand you now that ABNB has acquiesced on the exemption status and will no longer be assessing the tax on guests staying in a bona fide B&B Home??  I did a search as described above by Anne226 on my listing, but can not confirm that the listed charges are tax exempt.  In fact every listing in my area have charges, but no mention of the occupancy tax.  How exactly can I confirm that our tax exemption is recognized by ABNB?  I also have searched but was unable to find the email address for "Jennifer" the point of contact at DOR.  Could someone reply to me with that info?  P.S. Everyone who does this hosting thing should have liability insurance...that's really a 'no-brainer' according to my attorney.  P.S.S. Speaking of attorneys...one of my guests last summer, assessed a $90 occupancy tax by ABNB, is a tax attorney in Boston.  Been awaiting the outcome of this thread before I inform her that she was inappropriately assessed a tax...I'm sure she will take action.  Thanks for all the feedback.

[Anne226]

Hi, @Kathleen126. Since Airbnb recently updated their platform, your guests will no longer be charged occupancy taxes. Airbnb will still charge guests their service fee. You can check this by previewing your listing and select future available dates as a guest would. Select “price breakdown” to view charges. I do not know if or how MA would return taxes Airbnb collected on exempt B&Bs after July 1st.

[John47]

@Kathleen126 
I have posted this more than once on at least three MA STR tax threads here but in any case:
desimonej@dor.state.ma.us
The problem with the B&B category as I understand it is that Airbnb didn't/doesn't have a way to separate the small ones (1-3 rooms exempt) from the larger ones (4+ rooms NOT exempt).
As I'm not a B&B host, I haven't looked further into this listing type.

[Kathleen126]

Thank you all for your feedback.  This forum and your responses are like a breath of fresh air. As has been alluded to before, this issue could go down several different paths depending on actions within the DOR and ABNB.  I'm fairly confident that ABNB will pursue a strategy that enhances their bottom line.  How the DOR will approach the matter remains to be seen.  Meanwhile, thanks again for all your information and dialogue.

[Alicia242]

@Chase68  @Anne226  Thats true we arent taxed if we qualify for the the B&B home exemptions. Im exempt private room just ( 1 ) I list in the same space   I live in ( Not a separate apartment) serve breakfast. What a Sh1t show to figure out how to change the category on

airbnb when there isnt a differential between the two... why doesn’t airbnb have a b&b home category as well as a b&b establishment category ? They are very different!!!.

 Im glad my guests are exempt this tax, but I dont want to pop up now in just the B&B searches because Im not the B&B establishment and I  want and need to show up in the private room in home category, which is what  I am ....its a town house infact!

Im rcving emails from airbnb that action is required! The category you chose doesnt represent your listing and we want you to show in the right searches... If you dont change it by Dec 1 we will change it automatically!!  The trouble is ....its the only way to have guest exempt ...by chosing the B&B category!!! It seems like it should be easy to rectify but yet nothing is being

done. Once again another catch 22!