Arizona Taxes

[Brian149]

Hi all,

For the AZ hosts out there, can anyone comment on taxes that may be due to the State (and/or county/city in your area)?

With SB 1350 coming into effect at the start of the year I am confused if AirBnB is going to be collecting taxes and paying on behlaf of AZ hosts?

I have heard host technically are required to register for TPT tax and remit this tax but am confused about this.

Any comments are appreciated!

Thanks

[Brian149]

All, the state Rev Dept requires a TPT license, yes.

But according to current AZ law all online booking sites have to collect and remit occupancy (TPT) tax on your behalf. So that means you should file 0$ every time for your TPT filings because the online booking sites are already collecting and remitting your share.

The only time you should have to report an amount due is if you have booked your property directly on your own and not from a major online booking site. If you accept payment directly via check or cash or similar then in this case you may need to.

There have been several new law changes in AZ in recent years having to with less than 30 day rental and booking sites like AirBnb, HomeAway/VRBO etc. It is hard for the bureaucy to keep up......

My understanding is this: The whole point of the most recent law update is so that AZ can more easily collects taxes directly from booking sites. You are correct the booking sites are paying all taxes from all hosts together so the state cannot track your individual activity from a site AirBnb exactly. But the burden is on a site like AirBnb, not you as a host.

You do need to input your own tax ID details into AirBnb for 1099 purposes, but this is completely different from TPT taxes.

Stop worrying about it and google Arizona law for online booking site collecting TPT taxes.

Caveat, I am not a CPA or AZ Tax Attorney. Just have operated numerous short stay properties in AZ over the last few years.

[Theresa-and-Timothy0]

Unfortunately, Airbnb is not collecting the TOTAL amount of occupancy taxes. Grrr 

So in filling out a TPT return, you have to report your earnings. You can't claim zero. What airbnb pays has to be deducted somewhere, but I haven't figured that out yet. Fighting with AZ DOR right now about that. Airbnb collected and paid $266.36 and I'm responsible for $38.13, which I paid, But they want me to pay the full $266.36 as well. WTH? I can't make this come out right on their **bleep** form. 

Anyway, just venting.

[Cody96]

What you state above about Airbnb paying directly to AZ and we file as $0 is also my understanding after working with Airbnb support and my city finance folks.  

[Rosy55]

HI Cody- do you mind telling me where me put the $0? On the TPT-EZ form I mean. Also- is there a way to fill this out online or do we have to keep mailing it? Thank you!

[Hayley95]

Were you able to figure this out?

[Candice79]

HOW TO FILE rental TPT online at aztaxes.gov

1. figure out how much total rent I earned for the property.
2. Break that down into what I collected and what airbnb collected
3. Take what airbnb collected and divide into long and short term stays. 30 days or more is long term, less is short term or "transient". 
4. Add up all the long term rent I earned – airbnb and myself outside of airbnb.
5. BTW,  the rental income supposed to include fees like cleaning fees, pet fees not sure about deposits.
6. Go into airbnb and check out each reservation made that year. Document how much taxes they remitted and collected. Note that they remit all their taxes in a lump sum of all the owners together using their own tax ID numbers- not mine.
7. Log into aztaxes.gov. Get the license number of my property and enter it in.
8. Enter in period starting the first day of the year and last day of the year. 1.1.20-12.31.20 because I opted to file annually. (if I owe $2000 or less than I get to file annually). 
9. Now I see a form type image. Enter in my total gross rent I earned of long term stays.
10. Click the deductions tab. In line 776 enter in what airbnb long term rent they paid me
11. Then save or continue whatever and hit the deductions button again.
12. Go to line 551 and enter the following formula: Take the amount of money I collected outside of airbnb. Call it X.  Then divide X by 1.0175 = Y.  Then subtract X-Y= Z.  Enter Z in line 551.
13. Press save or whatever and then add a new line item. Select Maricopa for the region. The business description: Transient lodging 025.
14. So only the city of Scottsdale collects residential rental taxes, not state or county. (don't know about other cities). 
15. But the county and state collect short term residential rental taxes. So that’s what we’ve got to report.
16. In the form I see, enter in the gross amount of short term rent that airbnb paid me.
17. Then click on deductions tab and go to line 775 transient lodging.
18. Put in the gross amount again, because airbnb collected and remitted on my behalf.
19. So I shouldn’t owe anything!
20. Return to location list, then continue.
21. Skip all those questions about excess taxes by clicking continue
22. Then file this and pay. Whala!!

Note: 045 is city of scottsdale residential code.

025 is the Maricopa and state short term rental (transient) code

[Theresa-and-Timothy0]

The deduction is the difference in what you received as payment from airbnb and what airbnb reported.  For example: Airbnb collected from the guests for the year $4331.00   As a host, I received a net of $4201.07. The difference is $129.93 which is what my 775 deduction is.  

What I haven't yet figured out however, is how to deduct correctly, what airbnb paid to AZ Dept of Revenue in occupancy taxes. The figures aren't coming out correctly.  The way I originally reported, AZ Dept of Revenue says I owe it all. *sigh*

[Theresa-and-Timothy0]

Did you file yet? I'm curious if DOR accepted the return or if they sent you a letter saying you owed more.

[Vicky145]

Was the $542 for a short-term rental or a long-term? If short-term than Airbnb also collected the transient tax for the local municipality.  Each town is different.  Fountain Hills charges 1.6% for long term rentals and 14.17% for short term rentals which goes to Maricopa County, and Fountain Hills in two different classifications 044 and 144. I have found that the DOR employees aren't clear either.  I had one guy tell me that I just needed to pay Fountain Hills directly. Vicky

[Rodger-And-Dana0]

Does anyone know where to report the $4 per night bed surtax?  I've contacted the City of Tucson and the State of Arizona and have gotten nowhere.  Please help, I'm about to lose my mind.

[Candice79]

sorry everyone- I left out a few important steps!

HOW TO FILE rental TPT online at aztaxes.gov

1. figure out how much total rent I earned for the property.
2. Break that down into what I collected and what airbnb collected
3. Take what airbnb collected and divide into long and short term stays. 30 days or more is long term, less is short term or "transient". 
4. Add up all the long term rent I earned – airbnb and myself outside of airbnb.
5. BTW,  the rental income supposed to include fees like cleaning fees, pet fees not sure about deposits.
6. Go into airbnb and check out each reservation made that year. Document how much taxes they remitted and collected. Note that they remit all their taxes in a lump sum of all the owners together using their own tax ID numbers- not mine.
7. Log into aztaxes.gov. Get the license number of my property and enter it in.
8. Enter in period starting the last month of the year (December). 1.1.20-12.31.20 because I opted to file annually. (if I owe $2000 or less than I get to file annually). Then press view, then edit.
9. Now I see a form type image. Enter in my total gross rent I earned of long term stays.
10. Click the deductions tab. In line 776 enter in what airbnb long term rent they paid me
11. Then save or continue whatever and hit the deductions button again.
12. Go to line 551 and enter the following formula: Take the amount of money I collected outside of airbnb. Call it X.  Then divide X by 1.0175 = Y.  Then subtract X-Y= Z.  Enter Z in line 551.  This deduction is to keep the tax portion of your rent from being taxable rental income. It saves a little bit.
13. Press save or whatever and then add a new line item. Select Maricopa for the region. The business description: Transient lodging 025.
14. So only the city of Scottsdale collects residential rental taxes, not state or county. (don't know about other cities). 
15. But the county and state collect short term residential rental taxes. So that’s what we’ve got to report.
16. In the form I see, enter in the gross amount of short term rent that airbnb paid me.
17. Then click on deductions tab and go to line 775 transient lodging.
18. Put in the gross amount again, because airbnb collected and remitted on my behalf.
19. So I shouldn’t owe anything!
20. Return to location list, then continue.
21. Skip all those questions about excess taxes by clicking continue
22. Then file this and pay. Whala!!

Note: 045 is city of scottsdale residential code.

025 is the Maricopa and state short term rental (transient) code
Note: the city of Scottsdale says that if you have three rentals or less then you don’t need a TPT liscense or file/pay rental taxes. BUT if you use an online platform then you do. L

[Adalid2]

Hi, does anyone knows how to add the HOT to the listing.? All though this is confusing for many hostess including myself. City of Dallas is requiring to collect 7% of net room receipts from their guests and report the collection and pay the tax to the city. So how this applies for the ones the don’t collect payments from guests reservations and instead we are paid by Airbnb after guests checks-out? Thanks.

[Sondra33]

I too have been having enormous trouble with filling out the form correctly. I have called the help line again and again and received different answers. You gotta question why they don't provide clearer instructions somewhere for this widespread problem. Especially since I keep filing amended returns that cost them money to review!

I did finally get an answer from someone like this one: Put "zero" in the gross receipts and "zero" deductions. Because airbnb is filing under their own license number for us, the state and city can't have two entities filing for the same income. We still must fill this form out, just because they probably love paperwork.

But here's a lovely new problem that I recently discovered: airbnb is not collecting taxes on rentals more than 29 days and no where on the site do they make this clear, so I am left having to pay this out of what I thought was all my own income. Also, mind you all, the business code is different for this longer rentals, but the state is apparently not supposed to get any taxes, only the city. 

Finally, if someone can expound on the deduction code for grocery supplies, that would be helpful. I didn't even think about using this to lower the taxes for TPT before, but it makes sense!

[Sondra33]

Ah yes, I should say that I tried using the deduction code method mentioned by Candice up above and received a whopping bill for all the taxes that airbnb had already paid for me (plus taxes on the tax).

[Joshua116]

Hello Sondra. When I file my TPT, I use the codes: (025- Transient Lodging for Pima County) and (044- Hotels for Tucson). In both of these I put in the gross amount that airbnb paid me and then I use the deduction code 775 in both and put the full gross amount there as well. I called the the helpline months ago and was advised that I was doing it correctly, but I've also been given different answers in the past so I it could be wrong. I also only have reservations for less than 30 days, so longer bookings may need a different code. I would be curious to know which code that is because I'm starting long term bookings soon.