San Mateo regulations

[Nathan10]

What are the regulations for hosts in the city of San Mateo, CA? Apparently there is a 12% transient occupancy tax, but I cannot figure out how to pay it, or if some kind of registration is necessary. I looked at the business license form, but it seems like that doesn't apply to rentals... Does anybody have a clue?

Also, how does one collect the tax from guests? Wouldn't a guest think it's awfully shady if they show up and I start demanding extra money from them???

Thanks!

[Clare0]

@Nathan10 Welcome to the crazy world of Occupancy Taxes!  I can't speak for San Mateo since I'm in San Luis Obispo but I can share what I needed to do.  

In order for me to get a businss license I had to get approval from the Planning and Zoning Department.  My business license does say "To transact business of: Vacation Rental". After I got my license, I was informed of how much Occupancy Tax I needed to pay and how to pay it. I would imagine you might have to go through the same steps.

As for collecting the tax if Airbnb doesn't do it for you, yes, collecting from the guest at the door is an odious procedure.  I just increase my nightly price to cover it, but that has obvious downsides too, including having my price artificially inflated (as compared to those that don't pay it and /or those that collect directly from the guest) and having to pay the Airbnb service fee on money that is paid for taxes.  That said, I prefer not to ask guests to pay it separately.  Hopefully Airbnb will remedy this soon and I think they will since hosts like you and me are screaming for some way to add it like a cleaning fee.  Also, I noted a section in the new Terms of Service called an "Opt In Option"  for Occupancy Taxes.  I believe, and I might be wrong, that in the future hosts will be able to opt into a TOT collection program.  Keeping my fingers crossed.  

At least you are trying to do  the right thing.  It was reported recently that only 40% of vacation rentals in my area pay the Occupancy Taxes!

[Takahiro6]

Unfortunately in San Mateo, it's not that simple.

Increasing the rent or collecting at the door are not valid options.

3.56.050 OPERATOR DUTIES.
Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every transient. The amount of tax shall be separately stated from the amount of the rent charged, and each transient shall receive a receipt for payment from the operator. No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner hereinafter provided. (Prior code § 58.5.05)

[Wherly0]

Can anyone tell me where to find theTOT  required by city of San Mateo (not county if San Mateo)? Any documents? I am new to Airbnb. 

Thanks.

[Cynthia266]

Did you ever figure this out? I just got a letter from the State Tax board stating that I hadn't been paying. I had NO idea that I needed to pay anything. Does anyone know anything about this? I live in the city of San Mateo.

[Carol445]

I'm in San Mateo too and just got a letter with words like "severe penalties for non-compliance". I was actually thinking it was a scam initially with words like that. I hosted AirBnB last year and not that much so far this year. I'm hoping it's just from when I got this letter. 

[Bob175]

It seems obvious that San Mateo is just starting to enforce this. The letter (which I also received yesterday) refers to an amnesty period to register. I sent them an email and got an automatic reply showing receipt of my email and advising I'll hear from them soon. I'll post on this site when I get the response.

[Chris46]

Is the letter from HdL.gov?

This is a spyware company that cities are hiring to capture revenue and they are shady.

[Cynthia266]

Yes, apparently this letter just went out. No idea how much we are expected to pay and how far back we have to pay. I am going to contact Airbnb and the City of San Mateo on Monday. I think it is ridiculous and from what I can tell if a city tells Airbnb that they charge this they can charge it directly to the guests and pay the city. I already contacted City Council Member Eric Rodriguez and he didn't seem to know anything about this. San Mateo Airbnbers, let's unite, we had no idea this was required -- still don't know it is or for how long it has been -- but the city should have approached this in a very different manner.

[Erin229]

Totally agree - San Mateo handled this all wrong. They should be working with AirBNB directly to collect the tax, just like San Francisco does. 

I called the number on the letter and spoke with a contracter the city hired to handle the TOT. He told me that the TOT rate for the city is 12%. We have to pay these taxes on a monthly basis to the city via sanmateo.hdlgov.com. In terms of charging guests, we can just increase our rental cost, add an extra line item outlining the tax, etc. Whatever's easiest. All they need is the 12% at the end of the month.

One piece of good news - the city is NOT collecting back taxes on previous AirBNB income, despite this TOT being in effect for awhile. However, if you don't register your rental within 30 days of the notice, you will have to pay a penalty. 

Highly recommend calling the number in the letter. They sent me an email right away with instructions on how to register for the TOT payment program. 

[Cynthia266]

Hi Erin, Thanks for the helpful information. I also did some fact checking and what you say appears to be true. I spoke with the city's finance manager and learned that they have outsourced this to this HDL company in Fresno. The letter is legit. The amount is 12% and I guess we have to pay monthly. I have raised my prices to cover this amount and I guess we have to start paying as of our April 9 rentals. I have yet to register but this is what I have heard. It is disappointing that the city couldn't make this seamless through the Airbnb app as they do for many cities.

Our local paper wants to write an article about this in the Daily News and would like to interview some hosts and get their reactions. Please contact Anna Schuessler at the San Mateo Daily Journal, 650-344-5200, or via email at anna@smdailyjournal.com to speak with her. She would really appreciate it and it would be good to get our reactions out in the public. Many of us are hosting to help us stay in our current homes, it would be good for the public to know what is happening!

[Takahiro6]

I also got the letter and paid more than $7,000+ in taxes and penalties (majority) and interest. Going through the code, it is absolutely ILLEGAL to use AirBnB at this time for several reasons.

Here is just one example where you cannot be in compliance (emphasis mine):

http://qcode.us/codes/sanmateo/view.php?topic=3-3_56-3_56_050

3.56.050 OPERATOR DUTIES. 

     Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every transient. The amount of tax shall be separately stated from the amount of the rent charged, and each transient shall receive a receipt for payment from the operator. No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner hereinafter provided. (Prior code § 58.5.05)

What this means is that since AirBnB does not currently state the amount of tax to be collected as a separate line item when charging guests on their site, you are in DIRECT VIOLATION OF THE LAW.

I am done with AirBnB.

[Takahiro6]

As another example:

3.56.070 REPORTING—REMITTING.

     Each operator shall, on or before the last day of each month, make a return to the Tax Collector, on forms provided by the Tax Collector, of the total rents charged and the amount of tax calculated for transient occupancies for the preceding month. 

AirBnB does NOT publish to their hosts the total rents charged, only the amounts that were posted to hosts as earnings. There is a large margin in between that AirBnB collects as profit. This makes it again, impossible to be in compliance of the code.

This amount is a mysterious "guest service fee" as described here: https://www.airbnb.com/help/article/1857/what-are-airbnb-service-fees

Speaking to AirBnB representatives, I am not permitted to KNOW the "guest service fee" so I cannot properly report my taxes.

Here is the response I got when asking for the exact total of rents charged including guest service fees:

Unfortunately, I am unable to provide you with those amounts. The privacy of Airbnb users is very important to us. Consistent with our Terms of Service, Airbnb may provide information in response to a valid legal process. You can read more by visiting https://www.airbnb.com/terms/privacy_policy.

[Tony320]

Hi guys, just wondering if you guys got a grasp of getting things registered and setup? Just got the notice, would like to learn more about it. I just reached out to HDL and waiting for more information to be sent to me. Appreciate it if more information can shared. Thanks.

[Chris46]

HdL is not in Fresno.  They use  Fresno as their address to appear "official" since we pay our state taxes to Fresno.  If you look up the address it is a mail box for rent place.  This company is in Los Angeles, and apparently more and more cities are using them to bully their residents.