Including HST in pricing

Becky0
Level 2
Toronto, CA

Including HST in pricing

Hi,

I'm wondering is any fellow Ontario/Canadian hosts have advice about adding HST to your prices in a way that doesn't either leave you out of pocket for having to give away 13% of the fair rate for your listing, or put off potential guests for seeming to be a sneaky added fee.

Air BnB suggests that, if you have to charge tax on your listing, you can do so by confirming all booking via special offer that breaks down the base and tax portions, but I'm curious to know if anybosy has any experience with doing this and what wording you've used (did you include it on your listing, for example, or wait until you received a booking request to broach it?)

 

I am self-employed and HST registered, hence the question. I know there will be many Air BnB hosts for whom collecting HST doesn't apply, but some of you must be doing it!

 

I know that stays of one month or more are exempt from HST.

 

Looking forward to hearing what other hosts have found successful,

Becky

36 Replies 36
Clare0
Level 10
Templeton, CA

I have to pay Transient Occupancy Tax where I live.  I just factor it into my nightly price and pay it at the end of the month.  I hate add-ons.

Bob16
Level 1
Huntsville, Canada

I operate in Ontario and the only way I have found to charge HST is to include it in my pricing.  I wish that airbnb had an HST add on option - but they don't.

Bob

Let's flog AirBnB to add a manual "local tax" line where we can add our 13% HST, with a checkbox for an exemption if the reservation is longer than 30 days.

It seems to me that the only way to collect HST ( if you have to -as in if you are already registered ) is that you make note to all your Guests that you MUST collect it and therefore , it really has to be shown  it in the billing. So i dont see how  airbnb could not include this in the billing for those of us who know they must remit their taxes. Invoicing with it stated is required.

 

Also there are many who are not registred and if they generated more then $30K in short term rentals under 1 month-they may  be in for a rude awakening.  I think its best in this case if airbnb has an automatic flag that goes off when anyone generates $30K or more through just airbnb. Then its clear Airbnb has fulfilled its duties-if in fact it seems thats the route they want to go-which in my opinion is the only way-so they should just get on with it! There is no hiding from it. Full transparency is the only way. And in this 2 instances it is a " reasonable remedy" and in the first instance the HST registrant is asking for the seperate billing and stating it so they are doing their due dilligence , making sure they fulfill their tax obligations -and of course this will be supported by airbnb and its an easy thing to set up.

I imagine we will see this type of thing coming soon?

Hi @Suzanne32, ever the optimist, I think I see a faint glimmer of hope on this subject. Why? Because of this paragraph in the New Terms of Service (under Payments Terms of Service) which everyone was supposed to agree to on May 19:

 

"Opt-in to Host Remittance of Taxes

 

In any jurisdiction in which Airbnb facilitates Collection by Opt-in for Host Remittance pursuant to the Airbnb Terms, you hereby instruct and authorize Airbnb Payments to send Occupancy Taxes received from Guests at the time Accommodation Fees are collected to the Host who is obligated to send such taxes to the Tax Authority directly. You hereby agree that through third party payment processors, Airbnb Payments is merely processing Your election and direction to have Occupancy Taxes from Guests sent directly to the Host for remittance by the Host to the Tax Authority, and that You will remit all amounts collected from Guests as Occupancy Taxes to such Tax Authority. You expressly agree to release, defend, indemnify, and hold Airbnb Payments and its affiliates and subsidiaries, and their officers, directors, employees and agents, harmless from and against any claims, liabilities, damages, losses, debts, obligations, and expenses, including, without limitation, reasonable legal and/or accounting fees, arising out of or in any way related to Occupancy Taxes, including, without limitation, the applicability of, calculation of, collection of Occupancy Taxes in any amount or at all as to your transactions or Accommodations. Hosts and Guests further expressly grant Airbnb Payments permission, without further notice, to store, transfer and disclose data and other information relating to them or to their transactions, bookings, Accommodations and Occupancy Taxes, including, but not limited to, personally identifiable information such as Host or Guest’s name, Listing addresses, transaction dates and amounts, tax identification number(s), the amount of taxes received by Hosts from Guests, or allegedly due, contact information and similar information, to the relevant Tax Authority."

 

This leads me to believe that Airbnb is developing a system for hosts like you and me to collect the HST (in my neck of the woods it is TOT: Transient Occupancy Tax).  They seem to have the legalese in place, now they have to implement the software.  I'm sure that Airbnb has heard the howls of hosts who are frustrated. 

 

Let's hope I'm right!

 

 

 

 

 

 

Thanks so much Clare for taking the time to read these terms and share by post with everyone the exact section! I'm willing to bet  most hosts lose interest in reading through all the terms, that is if they bother to read any of it at all!

YOU ROCK for bringing these finer details to the forefront! Ive done an immense amount of research this long weekend and i see a lot has been going on -mostly Behind the scenes with regard to TAXES .

So hopefully Airbnb will make it even  more clear  once there are more DEFINED REGULATIONS and POLICIES as set by the Government about this new animal called "The Global Sharing economy" .and " Home Sharing"..

 

Here in Toronto Ontario, TAX  & REGULATIONS are  the main issues, and  at the core of the bargaining table, there are other issues. that stem out of that .I think many changes are heading our way..so maybe thats why Airbnb is a little slow to install that software which will lead people to believe its this way when it will change again very soon..Im afraid this uually means MORE TAXES & MORE REGULATIONS with questionable higher purpose if more Hosts dont take any initiative or bother to get involved. I'm afraid this is usually what happens. But Airbnb has been very Proactive in trying to do what they can from what i gather. There is only so much they can do-and it seems they have done more then most! Lets hope the The higher  ups dont use the tax to  spend more money on useless regulatory commitees who amoung other things ,will all pick apart the meaning of " Home Sharing" and find out how they can all assert their control over it and get a bigger piece of the pie.  For example as a Host who has more then one Property or HOME i share, because it is not my Principle Residence i may be subject to more tax?? Well i dont entirely belive that is fair a, as it is a Home I have created and I am Sharing it. I paid a lot of taxes in land transfer to the city. Truth be know i actually am willing to pay a reasonable increase in taxes and be happy about it, but not f it gets eaten up  with all the red tape creating commitees, bureacratic postering and collecting of statistical data.  Sure you can increase my Short term rental sharing or home sharing money BUT please Pay it FORWARD and put it back into the parts its directly connected to that needs an injection into that  City! Specifically in  Toronto thats Things like AFFORDABLE SUPPORTIVE HOUSING & SERVICES for the physically & mentally challenged, and Seniors.  

Hopefully people can seperate fact from fiction  I'm thinking  at least some of  this s coming from all the Hotels and Bed & breakfasts & Condo Boards, realtors and Property managers that feel threatened by the Hosts who are doing something SPETACULAR-because a lot of them are taking Hospitality to a new level and offering more.  

 

Sorry if i went on but i bring all of this up because there is the potential  to do something really great here. Ontario and Toronto we have such a powerful opportunity to Partner and Directly Demonstate how Transparency and Voluntary Disclosure and Compliance can Transform for the better-lets create  HUGE  win win for everyone.

I say we start a Motion were we say Yes we must collect and send in the tax, and yes its very important that we have this software to make it CLEAR we Collected the tax and it should be shared with the Government to make sure they get their fair share! Then lets do something really AMAZING WITH IT-as in something like the Habitat for Humanity Model. The possibilities are endless to do Greater Good with this Tax money. Maybe im dreaming but The More Transparency we have the More Transparency we should RECEIVE..Just a thought and one im uinterested to know if anyone supports?

@Suzanne32 Heh, heh, got a kick out of your post, but seriously I agree with all you said.  None of us mind paying taxes so long as they are not squandered on stupid, useless projects.  And, one of my biggest beefs is that they are punishing the little guy just trying to get ahead.  We're not the Marriots or Hitons..we're just average folks trying to make some money to cover expenses.  Yep, I've gone to County Supervisor's meetings and my gut reaction is that the politicians are in the pocket of the big guys who would just as soon see us drowned out.  

Regarding the new Terms of Service, well, I'm just a geek that likes going through this kind of stuff.  There are other little nuggets, but I won't bore you with them. 

Good luck to you and fight the good fight!

Hey Clare! I love people like you because I'm so in sync with all you are saying, but on a deeper level i really appreciate that you actively share something of value on this post!! . Not the typical whining and Complaining or ignorance ( that I see & that I have been guilty of myself n the past)
Anyways my point is not to harp on this - the last thing I want to do is judge..
I would love to take this as an opportunity for the Hosts that support the power of full transparency & Taxation - it's a great opportunity to come out of the dark, have certainty , & rally together because Collectively it will make a difference " Give Transparency and transformation a chance - and see the difference it makes " Airbnb should take their best data scientists available to issue a report on every movement leading up to the changes in laws and the efforts put forward- and how they played out in years to come . A huge task no doubt .but could be very interesting .. I think if this resonates to all the Hosts who have the right intention - let's come together - yes I mean those who are simple people with hospitality at their heart who created something great out of the sweat of their own efforts - right on you are - no Hiltons or Marriotss do I see - perhaps a petition to start ?

much needed

 

Cheryl100
Level 2
New Hamburg, Canada

Thanks for addressing this issue. I just need to know what to do about adding HST. I'm not clear if I have to charge or how and I'm getting bookings. I'll be watching how this conversation continues. BTW< I'm having so much fun hosting! I put my heart and soul into it.

 

Thanks again! 

 

I am with you Cheryl!

I will continue to follow this conversation/issue on HST.
I just applied for my HST# and don't know yet how to go about it.

I caanot seem to get the right answer from AIrBnB each time i have the minimal time to call in.

Thank you.

Mirriam

 

Janine3
Level 6
Toronto, Canada

This is months later, I'm just paying attention now. I don't think it's possible to fully charge out the HST, given that Airbnb holds back 3% for payment processing.  On every $13 you add to the price, you get $12.61 back -- can never make it up! 

 

Would really love to have airbnb build local tax calculation & add-on into the booking forms.  Is that being considered still?

 

janine 

oops, I just noticed that bookings for Chicago include a line for occupancy taxes ... why can't we have that in Toronto?? 

@Janine3 Yes, this is a real pain and the process for collecting and paying Occupancy taxes is cumbersome and confusing to guests and hosts.  I am in the same boat as you and have chosen to incorporate the tax in my nightly rate so I don't have to bother guests with it.  It is even more punishing since, in my case, and probably yours,  I have to use the gross payout to calculate the 10% tax I have to pay.  

In areas where Airbnb does collect the taxes by adding them into the cost of a reservation, it is the result of negotiations with the local taxing authorities and it isn't as simple as creating a line item setting for a host to enter a percentage to be collected.  As you can imagine, simply adding a setting for a host to enter the percentage amount could create opportunities for abuse (host entering 15% when the rate is really 10%, for example).  I believe this is why Airbnb does not create a host setting. 

So, until Airbnb makes arrangements with the tax authorities in my and your area, I'm afraid we're stuck doing what we do now.  

Given all the complaints about this, I'm sure Airbnb is working to figure out some kind of solution.