Hotel tax collection

[Amy38]

Airbnb is about to begin collection taxes for my town...Nashville,TN.  This is great because I am tired of askind guests for the.

The catch is that they simply remit a lump sum to the Dept of Revenue with no breakdown of the rentals paying it....I forsee some real problems with the state.

I would like input from hosts in cities where Abnb has been collecting the tax.....any problems.

[Russell76]

Thanks for the clarification!  

What do do you know about Business Tax? I was told I need to obtain a Business License and pay taxes for that with the state at the end of each year.

[Amy38]

@Russell76  That is another can of worms...you already have a city business license, I assume.

You go to metro.gov and downdoad the county and city form....follow the instructions and send them some money.  The forms are a nightmare because they want account numbers but dont specify which numbers are what and I am in hell right now over them, but they tell me I overpaid so am not stressing. I think the first account # they want is your Tntap # and the second is your old busines licese#.  It is very poorly desighned as a form and no one at the city is much help.

The only thing I know for sure is that the business type is 3 for the form.

Good luck.

[Anita185]

It's my understanding Airbnb is collecting the occupancy taxes NOT sales tax. The Airbnb line item states occupany tax. Shouldn't Airbnb be requesting from a host for their occupancy tax account number for funds to be applied to the correct account/host?? Being an accountant in TN for almost 30 years, it has been my experience that once funds are "messed" up with Metro or TN Dept of Revenue, it is impossible to get it straightened out. I understand Airbnb is worldwide and it's a nightmare to get involved in local and state tax issues. My disappointment with Airbnb that they do not explain or give information suggesting how a host is to collect taxes not included when a guest books a reservation. There is no flexibility for hosts in areas (as ours) to add taxes (like we can add cleaning fees and security deposits). Seems that would make it simple for hosts, guests and local tax authorities. A printed confirmation would have a complete breakdown of rates, number of nights, taxes, and fees. How do you word your request for payment of the taxes not collected through Airbnb? And THANK YOU for bringing this topic up! 

[Matthew285]

@Anita185 I am unsure how it works in your locality, but here in our town the local government asks if you are using any STR platform other than Airbnb. If you are solely using Airbnb, the government has worked out an arrangement where the government accepts that your occupancy taxes are paid properly since all your bookings are solely with Airbnb and (I assume) they have audited Airbnb's ongoing ability to track and remit the occupancy tax.

If you use other STR platforms (like Homeaway or Booking.com) then you do have to do the reporting yourself. So that is why they may not be asking for your occupancy tax account number.

[Anita185]

I have not been able to find anywhere in our local government that asks what STR(s) platform is being used. Local authorities are having STR hosts use the same form as hotels and motels in our area. I agree that having them know which platforms a host is using would give them the information to apply funds submitted by the platform on behalf of the host. As it is now, it seems a host will need to figure the total occupancy tax due then deduct amounts submitted by the platform and submit the balance due with the return.

[Amy38]

@Anita185

Just the opposite....Abnb is collecting state sales tax and we have to collect and remit metro hotel occupancy tax.

[Anita185]

I'm totally confused. Why is listed as "occupancy tax" as a line item if it is sales tax? I'm trying to find where I found it before on my listing. Does your line item state sales tax?

[Anita185]

EXAMPLE from listing as worded by Airbnb. (Sales tax would be rounded to $23. Occupancy tax plus $2.50 per night is rounded to $22.)

Guests:1 guest

$65 x 3 nights = $195

Cleaning fee $50

Service fee $32

Occupancy Taxes $22

Total  $299

[Amy38]

@Anita185

sales tax is 11%.  Hotel occupancy tax is 6%+ $2.50/night.

Yax is not charged on amount guest pays in fees to Abnb....that is NOT income for host.

I broke it down for you.  It doesnt matter what Abnb calls it, they collect the 9.25 STATE sales tax only.

Look in you messages fron Abnb on dashboard.  They wrote us.

[Anita185]

Yes ma'am, this is what I received,

"Starting March 01, 2018, Airbnb will collect and remit Occupancy Taxes for your listings in Tennessee State. Learn more Jan 17" To which you stated was for bookings after 3/1/2018. That seems to ring true since only one of my bookings was after that for March, April or May and the only one Airbnb collected taxes for so far.

What am I missing with the sales tax that it is 11%? For Davidson County the sales and use tax is 9.25% (7% state and 2.25% county). 

Agreed, host does not include Airbnb fees as income. I plan to reach out to Metro regarding the verification of what taxes they are to be receiving with their agreement with Airbnb. I'll post what I find out. 🙂

[Anita185]

There is another "conversation" posted, "AirBNB taxes for TN/local Nashville". It too is great information. 

From the host: "I had a conversation with the Metro (Nashville) Collections this week. He provided helpful info on collecting the Hotel Occupancy Tax. He mentioned that the city has plans to implement a system for "filing and paying taxes online." Note that this is only for the city taxes only (6% plus $2.50/nt); state taxes (9.25% in Davidson county) are a whole other department and process"

Check it out!

[Anita185]

From the host: "I had a conversation with the Metro (Nashville) Collections this week. He provided helpful info on collecting the Hotel Occupancy Tax. He mentioned that the city has plans to implement a system for "filing and paying taxes online." Note that this is only for the city taxes only (6% plus $2.50/nt); state taxes (9.25% in Davidson county) are a whole other department and process"

Check it out!

[Anita185]

Ms. Amy, you are so right that Airbnb is collecting sales tax (state and county) with the label of "occupancy tax". My guess sent me a screen shot of their booking cost with break outs. Airbnb also is NOT rounding up, therefore there will always be a small amount for the host to pay for those stays. The issue will be how the TN Dept of Revenue applies funds submitted by Airbnb without our account number. This has the potential of disaster! God help us all. Thank you Ms. Amy for your posts.

[Margaret311]

I just got a bill from TN for Sales + Use tax from March 1 forward (over $500).  I've e-mailed and called TN-DOR but can't get any response. Any additional detail you have on what I owe them, if anything, after Airbnb moved to paying tax on my behalf? I have a detailed list of what was collected paid by Airbnb since March. But there's literally nothing out there explaining what exactly is the process to reconcile what was paid by Airbnb vs. anything additional that might be owed. I refuse to pay them $500 simply because they sent me an arbitrary bill with no detail or resource to find out why it's not already covered!

[Amy38]

Abnb is collecting 9.25% state sales tax....You must still collect and remit the  6%+ $2.50/night city Hotel Occupancy tax.

It a pain and its the law.

[Carolyn214]

How do I find the information on my profile about the 9.25% state sales tax that has been collected thus far? (I just opened in May.)

I am understanding the following:

1. Abnb collects 9.25% TN sales tax and remits it on my behalf annually to the state of Tennessee.
2. I collect 6% +$2.50/night hotel occupancy tax and remit it to Metro Gov. of Nashville on the 20th of each month.

Is this correct? If so, will the invoice for the following scenario be as follows?

1 guest. 1 night.

Charge : $100

Sales tax: $9.25

Hotel tax: $8.50

Service Charge: $14 (roughly 14% is what I figure Airbnb charges)

Total: $141.75

Now, it seems like you ask your guests in a separate email to pay the hotel tax. How do they do that? Or do you have this set up in your booking settings?

Or do you just add it to your base charge with a note about the tax charge in your description? So I might say something like: "Because of local hotel taxes, your base charge is $108.50. This is so that I can remit the Metro Davidson county hotel tax of 6% + $2.50/night. I'm sorry for this inconvenience, but tax remittal through Airbnb is confusing!" Is this correct?

Thank you for your help!