Occupancy Tax - not set up yet?

[Alex598]

The state of Massachusetts and my local town have added occupancy taxes for bookings that take place this year. My understanding is that Airbnb will allow me to add a line item for this fee but only if they have it under their "Local Law" section. Since this just took effect, they have not put the option for me to add the occumpancy tax (Which is 14.25%). Is there a way to contact Airbnb to get it listed as an option or do I need to try and add this tax myself through my booking rate?

[Tatyana29]

Hi Alex - I have folded the cleaning fee into the nightly booking (because we are now taxed on that service here in MA) and then figure the tax on the total (11.7% for Nantucket). Trouble is, my tenants are now seeing astronomical booking rates from Airbnb of between 10 and 20% on top of the new tax hit. The other thing I can't get an answer on is this: because Airbnb doesn't have the tax line item set up for MA listers, are they now basing that service fee on the TOTAL of my new adjusted nightly rent which includes cleaning and taxes? It's a total cluster and I have spoken with three different people at Airbnb who have told me three different things. At this point, it's going to drive Nantucket vacation tenants to go and deal solely with all the island real estate agents, who are happy to help. Airbnb should've had something in place to handle this change AHEAD of the January 1, 2019 date when the new law took effect. They knew it was coming. It's a total cluster and I'm ready to leave Airbnb and just deal with agents solely. 

[Kathleen277]

Hi Tatyana

Read your post and feel your pain.    How did you know that we need to charge tax on the cleaning fee??  THanks in advance!

[Jon29]

i'm not happy on how airbnb has handled the ma taxes for the state and local taxes they are a no show unprofessional NO show on this ..

the state rates are really very high not too mention airbnb hasnt done anthing postive to help the host out on this new issue..losing some guest right becasue of it ..

There is NO EXCUSE for this and i look like a compete moron trying to collect  this money Why  doesn't airbnn take there heads out of the clouds and  make this right please..

thanks 

[Christine144]

 The worst part is they don’t know what the **bleep** they’re doing an Airbnb when you call! 

They are making a lot of money off of us and the service sucks

[Kathleen277]

Alex I read in the help center that they expect us to collect it from the guest in the resolution center after the guest books.  Unfortuntately because it is a percentage and we never know how long a guest will book we can adjust it unless we add it into the nightly rate.   I added this to my the top of my listing........ hope it helps!!!!!   After reading Tatyana's post I am now investigating the tax on the cleaning fee portion.  But here it is

****** IMPORTANT *******BEFORE YOU BOOK ********    EFFECTIVE 1/1/19 MASSACHUSETTS & THE TOWN OF ______ ENACTED A  _____%  OCCUPANCY TAX .   UNFORTUNATELY AIRBNB IS NOT YET EQUIPPED TO HANDLE THIS. SO WE ARE FORCED TO COLLECT THE TAX AFTER YOU BOOK VIA THE AIRBNB RESOLUTION CENTER. THIS TAX IS BASED ON HE THE RENTAL RATE NOT  ANY FEES SUCH AS THE  CLEANING OR AIRBNB FEES. THANK YOU FOR YOUR PATIENCE AND WE APOLOGIZE FOR THE EXTRA STEP BUT WE DO NOT HAVE ANY CONTROL OVER THE AIRBNB BOOKING SYSTEM. *******

ALSO WE ENCOURAGE YOU TO READ ALL ABOUT OUR LITTLE SLICE OF CAPE COD BELOW

[Alex598]

Hi Kathleen, thank you for the tip. It is quite annoying that it is not updated yet. I didn't think about collecting it in the resolution center. My first thought was after receiving a booking to send the person a special offer that would include the appropriate tax amount. My only concern is that if they refuse to pay in the resolution center, I would have to cancel their reservation and that could impact my ratings. 

[Kathleen277]

Yes ALex they are not making this easy considering they were so pro- tax in their local ads.   I did not consider the reprocussions of a guest who would not comply and the wrist slapping that Airbnb would take on the cancelled rez.   They also recommend to collect in cash on arrival but that could be risky as well.      As Tatyana suggests I think looking at local rental agents can be beneficial for some or maybe CL and another local rental site that I currently use that still allows guests book direct with owners.   Good luck !!   What town are you in ??

[Alex598]

Hi Kathleen, I am in Provincetown. I do not like the idea of collecting the tax in cash at all, especially since, as I understand it, Airbnb will be remitting the tax on my behalf. I just updated my listing on Homeaway and it was so simple to just add that tax in, I wish Airbnb had that option. I guess until they get it figured out I am going to just send people a special offer that includes the tax. It may not net out perfectly when airbnb collects the tax, but at least I will not be losing the entire 14.45% tax, which is also crazy in and of itself, but I guess that is not an Airbnb problem. I already see it as cutting into bookings. I had someone interested yesterday but after the price went up $500 I have not heard back...

[Ken-and-Kathleen0]

Your statement is incorrect. According to the State info page on the tax any fees including cleaning fees, service fees, and security deposits are being taxed.

What is “rent” that is subject to tax? 

The total amount of rent that is subject to tax includes all amounts paid by an occupant to an operator or intermediary, even if not required for occupancy. Rent includes all optional charges, including but not limited to the following:  security deposits, insurance, linen fees, cleaning fees, service charges. If the total amount of rent is less than $15 per day, no tax is required to be collected.

[Shari62]

Hi Kathleen

Thanks for the tip as well.  I am new with Airbnb and have not added to the tax to the bookings I have so far, so I will have to take it out of the payment.  Moving forward, however, I will use the recommendations and try sending  it as a special offer, with a disclaimer added to my site.

Thanks for all the thoughts on this

[Tatyana29]

Hi Kathleen - I apologize I am just seeing your response now. I was so disgusted, I went dark on Airbnb for several months. I have now come back on to investigate and am just as dismayed that nothing has been done to rectify the tax collection situation on their part. Sheesh. Anyway, here's the part of the answer that pertains to the tax on the cleaning and service fees:

The total amount of rent that is subject to tax includes all amounts collected by an operator or intermediary from an occupant, in exchange for occupancy. The term “rent” includes all optional charges, including but not limited to insurance, linen fees, cleaning fees, and booking fees.  Specifically excluded from rent are bona fide refundable security deposits; amounts paid by an occupant that were previously subject to sales or use tax by the operator; and amounts paid by an occupant for services offered by the operator on similar terms to non-occupants in the regular course of the operator’s business.

I got that verbiage above from this page: https://www.mass.gov/info-details/room-occupancy-frequently-asked-questions#what-is-subject-to-the-e...

[Christine144]

This is going to result in a lot of cancellations. People are going to  think it’s a scam and they already pay for a service fee so I think this is bull**bleep** and Airbnb should get it together

[Lauren259]

Our local laws recently changed as well, as I just purchased a sales & use (tax) license as well as received a permit from the City (cha-ching . . . ).  Airbnb's site suggests that we collect tax in cash upon arrival of the guest?  Hmm . . . That doesn't feel right to me. AND, if airbnb is submitting State taxes (I'm in CO), then I don't want to collect them - I just want to comply - not interested in double dipping or taking a 10.5% loss because I'm in compliance of new laws.  What to do???  Any suggestions appreciated! lauren in Longmont, CO

[Alex598]

I agree completely Lauren. I just want to do it the right way! I have decided that until Airbnb figures it out, when I get an inquiry, I am going to send the potential guest a message explaining the tax and then send them a special offer for the rental rate + the tax, which for me is 14.45%. This probably is not the best way to do it and I am not sure how it will work out when it comes time to remit the money, which for me will happen in August for the first time, but at least the money will be there and I will not be losing out.