Hawaii accommodation tax

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Hawaii accommodation tax

Is Airbnb collecting Hawaii state accommodation tax yet?

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Stephanie
Community Manager
Community Manager
London, United Kingdom

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101 Replies 101

Elena,
Hawaii taxes are hard to explain to guests.  This is how I would compute my tax on my Oahu property.  I would pay $92.23 + $46.89.  See below for more.
   
      
 
 Visible Tax Pass-On Report to Tenant  AdjustedGET 
 Customer Pmt Rec'd  *Gross Rental Income 9.250%4.500%  1.045*GET 
**TAT**GETProof GET Payable 
  $                      -   $              -   $              -   $               -   $                -  
 $        1,134.20 $             997.10 $       92.23 $       44.87 $   1,134.20 $          46.89

​I don't want to defend Airbnb, but I do want to explain how life more difficult for us if Airbnb tried to calculate Hawaii State   Let me know if you think I did this wrong.
 
1.  If you ADD GET-TAT to the listed price. we must "Gross up" the amount to charge the guest.  Having Airbnb explain this (plus the TAT) to the guest can lead to guest questions that are not easy to explain.
2.  Airbnb deducts a 3% marketing fee from the amount the guest pays, then it pays us what's left.  I use what I receive from Airbnb.  I'm not sure the guest sees that and again, I don't want to undertake the added explanation.​
3.  I have a big cleaning fee ($250) which Airbnb charges to the guest.  That already adds $25.00/day to a 10 day stay.  It's just one more calculation the guest must deal with.  
 
For the above reasons, I find simple is better for dealing with the guest.  So, I just resign myself to starting with the amount of money paid me as the starting point to Visibly pass on the tax to guests.
 
This is how I "Visibly disclose" to a recent guest. But I will actually play $53.54 in GET and not $51.23.
 
Dear xxxx,
 
To comply with Hawaii tax disclosure guidelines, I disclose the breakdown of $1,295 in forthcoming rental receipt from Airbnb as follows:
 
Gross Rent                 $1,138.46  
Accommodation Tax        105.31
Gross Excise Tax               51.23
Total                            $1,295.00  
 
Still with me?
 
 
C

Of course we can solve the deficiency on our own, each private owner spending a few days to research the issuue and to read the Internet, then a few hours to set up our own routine (maybe it's not correct, because we are all reading different sources), and then a few minutes each booking to send that extra clarification to the guest...

 

When I imagine how much time and effort would be saved for all individual owners by just doing in in one central place (such as Airbnb) it's mind boggling. If Airbnb cares

 

To me it's not complicated at all. We don't have to explain to the guest that "we need to add the GET to the gross total and then tax the sum...". All we need is to state explicitely the total of the taxes passed on. In this article by tax preparers on Oahu:

http://www.taxservicesoahu.com/passing-along-hawaii-ge-tax-customers/

it's explained that "To bridge the gap between what a business collects from their customers and what is payed to the state, many businesses add 4.16% to each sale on the Neighbor Islands and 4.712% to each sale on Oahu."

 

On Maui we just calculate 13.42% (9.25%  TAT and 4.166% GET, the sum rounded up to 13.42). In my 15-years experience of renting two condos on Maui, nobody ever questioned this number, because it's the same number everyone else is using on Maui. Some people asked to do away with this completely, but's that's another issue 🙂

 

In your case on Oahu, the total rate is probably around 13.97%. Since we don't have properties there, I don't know exactly, but it should be one common number that everyone uses for our particular purpose - to calculate the GET + TAT on transient accommodations.

 

We also have a rental house in Tahoe and the occupancy tax there is 10%, but that tax applies to both the rent AND any fees we collect up front. What VRBO does, they just ask what's your occupancy tax. For us, it's 13.42% in Hawaii and 10% in Tahoe. Then for each fee we set up, they ask if it's taxable. For Hawaii, I say none of the fees are taxable, and I can price the tax into the fee. It's not me who reports and pays those taxes, so I don't have to itemize them. For Tahoe, we only have a cleaning fee and I check that it's taxable at 10%. That's it. Takes minutes to set up, and saves tons of time for owners and makes it clear to the guests.

 

Anybody from Airbnb reading this? Could you please make it happen for us?

Aloha Elena!

Since it appears that you have been renting in HI for a while now, how do you collect the taxes? As a new host this has been the most frustrating part of Airbnb. What I have been told by Airbnb is that I can do it one of two ways:

1. Include it in my nightly rate. This is a bit daunting as my rates can change on a regular basis

2. Include it in my description and then request addtional payment through the resoulution center.

I have been using the latter but I hate asking for addtional funds when the guest has already paid out kind of ruining the reservation purchase experience. VRBO / HomeAway allows this in your settings so why can't this simple coding addition be added I have asked on a number of occasions. I don't want them to pay the taxes just collect them on my behalf so that I can pay them thus absolving them form any liability and allows me to keep my records straight.

Anyone else?

I agree Airbnb should collect for us.  They do it in many cities already.  Why is Hawaii any different?

Rich

I agree it should be configurable but there needs to be another choice as well. 
1. It's included in the nightly rate - don't collect

2. Calculate and collect it for me but give it to me so that I can pay it (I agree to be responsible)
3. Do not collect it because it's collected by the front desk at check-in, as my property is a timeshare and managed by a resort organization which collects and pays the tax for all guests of the resort.

100% agree

Thank you so much Dean! You are a mastermind!!! 

Hi Dean! How do you collect the taxes on the actual charge? I'm wondering how they pay it out? 

My concern is about the possibility of double collection. 

 

If the bills pass and Airbnb is allowed to collect the tax, will there be a choice in the listing section to say "DO NOT COLLECT THE TAX FOR ME, IT IS COLLECTED AT THE PROPERTY UPON CHECKOUT" ?  

 

I own timeshare in a resort that is managed by a hotel chain.  When my guests show up to use my week at the resort, they are greeted by the front desk staff and asked for a credit card for the Hawaii state daily occupancy taxes, along with anything they would like to charge to the room (spa services, food, activities, etc.)  

If this goes through, Airbnb needs to provide us a way to opt out, or to say "it's already collected - so please don't double collect the tax". 

 

Has anyone from Airbnb addressed this?

Agree 10%

Aloha Momi! Thanks for your response! So I'm wondering if I do not have any tax ID or rental certificate, should I expect to just save 9.25% of my earnings to pay the tax each year? I'm still pretty confused about all this...thanks for your help 🙂

Hi, as a user of Airbnb my family and I have been wanting to plan a trip to Oahu through this sight. How do I know that the rental I am booking is legal and registered? Some cases I see a license or registration number in the listing. My question is; if taxes are including in the booking cost does that also mean they are registered as a legal rental? 

All owners are legally required to post Tax ID number somewhere in our listings. If you don't see one anywhere, or if owner can't produce when asked, you are looking at a non-compliant property. Thanks for being vigilant. Those of us who comply and pay our taxes appreciate your intent,

Dana36
Level 1
Honolulu, HI

Is this legal in Hawaii ?  I can claim it on my GE taxes?

 

dana Higa 

[phone number hidden] [email address hidden]

 

 

Rick52
Level 1
Temecula, CA

Does anyone know if / when AirBNB will create a separate field for "hotel" taxes, so the guests will pay them separately from the daily ret amount?  If they could at least do that, we wouldn't have to bury the tax in an inflated rental rate.  It would also address the 1099 issue that was brought up.  The GET / TAT taxes in Kauai amount to 13.42% of the rent, which is quite high, but the guests are unaware of how much we are collecting for the taxes.  They just see a daily rental rate that may seem too high to them.  On VRBO I am able to charge a certain rate for the rent, and the guest pays the tax separately, which is much cleaner.  This also provides a better audit trail should I ever be audited.

 

Thanks in advance,

Rick