Room Occupancy Taxes

[Ruth544]

Airbnb is charging guests at our 3-room bed-and-breakfast in Massachusetts, a room occupancy tax which by law we are not required to pay.  I have gotten nowhere with Aiurbnb trying to resolve this problem.  I feel this is a fraudulent charge which guests should not have to bear.  I see some mention of hosts charging the tax to guests manually, not asking Airbnb to collect.  It would seem a simple task to add that option to our listing information - "do you want Airbnb to collect any taxes due for you, yes or no".  Then I could say no, guests would not be charged, I am not liable, Airbnb is not liable, and guests are saved a considerable amount of money.  Why can't someone answer this issue?

Ruth @ The Seagull Inn in Marblehead, MA

[Tom-and-Hector0 · Accepted solution]

Hi Ruth, I know how frustrating this has been for most of us. I learned just reading through some of the forum this can be fixed easily. I also have 3 room in a owner occupied home and serve "breakfast"  (oatmeal, coffee, tea maybe some bagels and fresh fruits) to our guest and noticed that our guest are getting charged taxes when we should be exempt. What I learned was that I listed my rooms as private room in a "house" when I added my listings. I went back and changed the type of listing to a bed and breakfast right off. I then went back to do a mock reservation and sure enough the taxes are gone. Hope this helps! Anyone else have anything to add that I may have missed?

[Ruth544]

Thanks so much, Tom & Hector.  I just went in and checked - our rooms all were listed as Property Type of Bed and Breakfast, but they have a new question there "what  property is most like your place?", so I put bed and breakfast for that.  I'll try to do a fake reservation and see what happens, but looks hopeful!

Ruth @ The Seagull Inn

[Ruth544]

Yes, no occupancy tax charged!  Yay!  So very helpful, Tom & Hector!

[Tom-and-Hector0]

That's awesome. I however have a different concern.....I'm not a licensed bed and breakfast establishment and so I don t think airbnb will recognize me as exempt I guess I have some more question for airbnb. According to the mass general law my 3 rooms in owner occupied home is defined as a b&b. I'm more confused now than I was a few hours ago. Also I feel that because I don't serve a hot meal my guest expectation would leave me with unwanted negative reviews if I leave the listing up as a bed and breakfast. HUMMMMMMMMM

"A bed and breakfast establishment is defined as a private owner-occupied house where four or more rooms are rented, a breakfast is included in the rent, and all accommodations are reserved in advance. This kind of establishment is subject to the room occupancy excise. However, private owner-occupied houses where three or fewer rooms are rented, a breakfast is included in the rent and all accommodations are reserved in advance, are defined as a bed and breakfast home and are not subject to the room occupancy excise."

[JD29]

Which law specifically defines a private owner-occupied house as a bed and breakfast?

[John47]

@JD29 
As @Susan151 said, this thread is specifically dealing with Massachusetts STR tax and your listings appear to be in FL so nothing here applies to you, ok? Other than the basic fact that occupancy/STR tax and property tax have nothing in common.

[John47]

@Tom-and-Hector0 
Just found this thread tonight as knew about 3 other threads related to MA STR but not this one.

Anyway, re 'breakfast': Since the law gives NO definition of it, and neither does Airbnb (that I know of), and since one hotel chain (Extended Stay America) that I've used has a "grab n go breakfast" which consists of self serve coffee, granola bar packs, and prepacked small muffins, I think as long as you're clear in the description (which may not get read but...) as to your version of what it consists of, I don't see any issue re reviews.

[Annie1093]

This is so helpful. Thank you.

However, we are in a different position, renting only one room in our house. To say that it is a Bed & Breakfast - in the most common understanding of the term - would be false advertising to say the least. 

It seems to me that the MA law was created in the interest of specifically taxing air bnbs which have undercutting the Hotel and B&B markets. There are people with entrepreneurial spirit who have built their own business using the air bnb platform and who own (sometimes multiple) non-owner-occupied units. That is fine and good for them, and I believe it is fair that they be taxed.

It seems that the exemption was retained to accommodate both small B&Bs as well as those of us who are, in the original spirit of air bnb, renting the guest room in our house. 

However, in order to use the exemption - which was designed for hosts like me - I would need to list my home as a B&B home - which is not an accurate description of my home. 

I look forward to hearing from others in this position. I plan to call air bnb tomorrow to see if I can resolve this.

[John47]

@Annie1093 
By renting one room in your home, and providing some sort of breakfast, you qualify under DOR rules as a B&B home -but- seems that Airbnb has yet to find/create a way for you to indicate that you're in that class/category instead of a B&B establishment which is the larger, more commercial ones. So --- Airbnb needs a way to differentiate the two types so that you as a 1-3 bedrm setup, are exempt from tax and registration but others in the 4+ bedrm setups are not exempt.
I've not yet seen any posts that indicate this has occurred yet or if/when it will BUT if they begin requiring a DOR Cert # or you're kicked off, then it REALLY becomes an issue and maybe DOR will be able to get Airbnb to fix it.

[Annie1093]

Yes, this will be a big problem if airbnb does not fix it. The MA law distinguishes between a ‘Bed & Breakfast Home’ (3 rooms or fewer) which is exempt and a Bed & Breakfast Establishment’ (4 rooms or more) which must pay room occupancy tax. Airbnb has the categories ‘Bed & Breakfast’ (tax exempt) and ‘House’ ( room occupancy taxes charged ). 

[Annie1093]

I do not think DOR will get Airbnb to fix it. I think hosts will need to point out the error to Airbnb. 

[JD29]

We have 3 rooms in our owner-occupied home as well and since March occupancy taxes have been applied. Aren't property taxes equivalent to occupancy taxes?

[Susan151]

@JD29 You have responded to a Massachusetts law, which is not applicable in Florida. To answer your question however, property taxes and occupancy taxes have nothing to do with each other.

[Ruth544]

Hello, JD6 - per a reply from Tom  Hector on August 27, if you edit the type of listing to be "bed and breakfast", room occupancy taxes will not be charged.  And property taxes are completely different, levied by the town on the value of entire property, no connection to the fees charged for renting rooms.