Hotel Taxes - Occupancy taxes

[Cynthia1]

I normally pay my own hotel occupancy taxes in San Diego where I rent.

I am new to AirBnB, and not sure if they are paying them for San Diego.  The info page, seems as if they are, but I am unsure.

Can anyone let me know in the area, what they do?

Thanks

Cyndi

[Clare0]

Are you a host or guest? I'm a host, but not from San Diego, and I pay the Occupancy tax out of my earnings.  Please clarify your question.

[Tuan0]

Hi Clare,

I'm a host, do I have to get a business license with the city to host. I'm in Los Angeles?

How do I pay my TOT?

Thank you,

Tuan

[Clare0]

I can't speak to what the county or city of Los Angeles requires, but in San Luis Obispo I had to get approval from the Zoning Department then get a business license.  I pay 10% of the gross (before the 3% Airbnb fee) each month.  You might consult with the city/county Tax Collector to see what is or is not required.  I would be astonished if you were not required to do something similar to what I have to do. 

By the way, I just incorporate the tax into the total price I charge.  Hate nickel and dime-ing the guests. 

[Patti1]

Hi, I am new also and I have my place listed with taxes included.  I don't want to nickel and dime either.  My question is, each month I have to pay a 7% tax.  I am confused as to what I put on my monthly tax declaration. Say my place is listed at $135 includes taxes, when I do my monthly declaration, do I put $126 and then 8.80 in tax  =  $135 it rounds up..   Last month I put $135 and I had to pay out a nice chunk from my pocket. I want the customer to pay the taxes? 

Thank you

[Clare0]

@Patti1 Since I want to net somewhere between $195 and $200 I add in the 3% Airbnb fee and the TOT tax of 10% which in my county is calculated on the gross (before the 3%)  So I charge on the weekends $225 which includes the TOT and the 3% Airbnb fee.  The guest is paying for the taxes and Airbnb fee....it is included in the nightly fee and I pay it for them.  

That said it does create some listing inequalities since some hosts add the TOT to their nightly prices.  So another host might advertise for $195 or $200, but the guest winds up paying later. 

Someday Airbnb is going to have to collect the taxes for everyone.  When that happens the playing field will be level for everyone. 

Hope that helps!

[Patti1]

Jeez I never even thought abouth the 3% Airbnb charges. Thanks for that.

Ok, I think I understand, but let me clarify, so it can sink in.  So if you charge $225 per night, when you do your tax declaration form, you would put like $195 say, to cover taxes and Airbnb fee. You are not out of pocket anything. The way I did, my 1st tax form, was I put the total I charged nightly, so I was out of pocket. What an ass I am...

[Clare0]

@Patti1 Things might be different where you live, but I have to pay the taxes on my nightly price before Airbnb takes out their 3%.  So if my nightly price is $225, I pay an  occupancy tax of $22.50.  What I finally put in my pocket is  $196.25   ($225 - $6.25 (Airbnb fee)  -$ 22.50 (occupancy tax) = $196.25) Does this make sense?  I first figure out how much I want to be paid then add in the Airbnb fee and the occupancy taxes. When I report to my county I report $225 and pay $22.50.   But again, the reporting / paying requirements in Puerto Rico might be different and you'd better check.  

[Patti1]

@Clare0  Thank you so much Clare. I got it now.

[Randy54]

Hi Clare,  is your Airbnb home technically a vacation rental? Does the need for the zoning ordinance and business license apply if we are simply welcoming guests to our second home while still using it oueselves? The SLO planning department site seems only to apply to 

[Randy54]

Formal Vacation rentals

[Clare0]

Hi @Randy54 According to San Luis Obispo County tax collector, yes, my Entire Home listing is a STR vacation rental.  When I first started I had to get the Zoning Department's approval in order to get a business license.  My listing is a house on my property that my Mom built and she subsequently moved into assisted living in Paso.  Since I am in an unincorporated area of the county, thankfully, I am not subject to any city taxes, just the 10% county TOT.  

Do you have a vacation rental in San Luis Obispo?

[Randy54]

Hi Clare, no we just have a second home in San Simeon (SLO) that we use occasionally for Airbnb guests. Our real question is about what constitutes a vacation rental. A property fully dedicated to that? I don't want to go through the minor Use Permit and business license process, pay occupancy taxes if that is really only for fully dedicated vacation rental properties. 

[Clare0]

@Randy54 Obviously I can't speak for the County, but I can tell you that on my TOT form, which I have to file monthly, it has the instructions for Allowable Deductions (from TOT) it says: 

" Enter the amount of rent charged to a non-transient (more than 30 consecutive days), Federal Government Employee....."

From that, I infer that TOT does not apply for rentals over 30 consecutive nights (Airbnb goes by nights, not days).  

That said, I'd advise contacting the tax collector (805) 781-5831 to clarify what length of stay requires TOT.  

I don't think whether you use the property for personal use from time to time makes any difference for paying TOT.  That's more of a Federal / State income tax issue. 

Sorry I can't provide you with clearer info, but I don't want to give you wrong information.  

[Jenny46]

Hi Clare,

Thank you so much for all of your input on this subject of Hotel Tax.  I have been an AirBnB Host for just over a year.  I couldn't figure out how to collect the tax without "nickel and diming"....so I just avoided it.  A new really frightening article just came out in our local beach news about massive fees that Los Angeles is going to levy against hosts that aren't registered or paying taxes.  I want to register and hotel tax but it looks like it is pricing me much higher that my neighbors.  I truly hope that AirBnB will wake up to this situation in Los Angeles and start impounding the taxes.  It will really even the playing field.  I think AirBnB is leaving too large of a grey area for the hosts to try to figure out this sensitive issue.  I also think a lot of host are just unaware of the gravity of what might be coming.