Local Occupancy Taxes - Why is Airbnb refusing to make this painless?

Roberto119
Level 2
Brownsville, TX

Local Occupancy Taxes - Why is Airbnb refusing to make this painless?

It is very frustrating and a lot of additional work to collect, track, and calculate correct local tax amounts because of Airbnb's refusal to add a non-taxable line item to be able to collect local Occupancy Taxes.

I am in Texas. Airbnb collects and I suppose remit the State 6% Occupancy Tax, but they DO NOT collect the 11% City and County Occupancy Tax which we are required to collect.

Scenario 1: I add the 11% tax to the rate.... bad idea, very bad idea. My rates now look inflated. The 6% State tax is also levied on the added 11% to the rates. Airbnb collects commission on the 11% tax now included in the rate. 

Scenario 2. I collect the 11% through the resolution center. Besides being a lot of work, if the traveler chose split payments, the resolution center does NOT allow you to have a second pending payment request until the full balance of the reservation is paid. So you need to leave it in limbo until the second payment of the reservation is paid, and then you can submit the tax payment request through the resolution center. Once you are successful to do this, and the traveler pays the tax, the system does not reflect the payment in the travelers message thread or total quote for this traveler.

My questions is why, why not add a non-taxable line item for local taxes? (all major Airbnb competitors do it...)

It is really a lot more work to track and to be in compliance because of Airbnb's decision not to do this, thus not making our Airbnb experience a good one.

Is anyone else feeling this pain?

8 Replies 8
Rebecca160
Level 10
Albuquerque, NM

@Roberto119I am in full agreement with you!

I do include the local tax in my rate, and it is true that my rate looks inflated and Airbnb is making a profit on something that they should not, yet it seemed the simplest thing to do, while guarnateeing that I would get the money to pay the taxes.

It is a pain and totally unecessary. There should be a line item for this, as well as for a pet fee.  Both of these were suggested topics (by many people)  for the Global Q&A with neither question being addressed. I guess Airbnb just does not give a hoot what hosts need to run their business model.

Vicki157
Level 2
College Grove, TN

Roberto, I'm having the exact same problem.  In Tennessee they now collect what they call Occupancy Taxes, but they are actually local taxes and I have to pay 6% plus $2.50 @ day taxes and there's no way to line item charge that.  The local occupancy office also told me to do what you are doing which is add it in and then take it out.  It is extra hard and it does inflate the rates.  Either way it is not clean.  I would much rather pay all the taxes than try to pay partial and have no way of collecting the extra tax.  It seems that arbnb is trying to make it easier but they are not doing their research and therefore are causing it to be much more difficult for hosts.

 

I have called and emailed help with absolutely no help.  They don't even understand the problem.  Is there a solution?  

Regina308
Level 2
North Carolina, United States

I'm having the same exact problem in Gatlinburg, Tennessee.  When people get ready to book, it lists occupancy taxes with a price for the guest to pay. The problem is that they are NOT collecting the actual occupancy tax (3%). They are only collecting the sales and use tax for the state and local jurisdictions. I began using Airbnb last year (2018), so it was only at time to do my taxes did I realize they had not been collecting the 3% occupancy tax all year.

 

When I found out and contacted their support, I was told that they were collecting the right amount. I told him that they were not collecting th 12.75%.  They were only collecting 9.75%. Then he said that was the amount they collected because that was the agreement Airbnb made with the state.

 

Like Roberto, I questioned as to why they wouldn't allow a line for me to add an occupancy tax fee since they allow that for cleaning and other fees.  He said that wasn't an option at this time.  He also said that I could send the guest a request for the additonal fee.  Like I told him, it looks very suspicious to someone that thinks they have already paid the "occupancy tax" since that's what it clearly shows up to them when they booked initially, when a host turns around and asks for the same thing "occupancy tax" again. Then he suggested I request cash from them when they arrive.  Needless to say, neither of those are appropriate. 

 

Airbnb needs to collect all of the taxes and remit them.  If they are not willing to collect and submit the additional city occupancy tax for us, they need to collect it and send it to us just like they do with any other fees. 

 

Vicki, they definitely need to do something about the problem.  They are definitely aware of the issue, but are neglecting to do anything to rectify the issue. 

 My city sales tax person won't do an agreement with AirBnB because they won't list taxes collected by each host, they want to just send a check that says "AirBnB sales were $xx so we're paying 12%", so they don't know which hosts paid what, which is required by city ordinance.  AirBnB maintains that they can't do this because they are protecting "hosts' privacy".  What bull pucky!  If I'm operating a legal business here I have to get a state business license and register with the city sales tax office, which charges 5% sales tax and 7% hotel tax (12% total).  The city is entitled by law to know what our sales are.  If they won't collect and pay it, we need to have an option so we can enter tax percentage and have it be in the guest billing so they pay it when booking!  This is not rocket science, it's simple straightforward coding, just add up the amount and calculate the tax, add it to the bill.

I am having the same issues in Pigeon Forge. What did you decide to do in this situation?

 

We own a cabin in Gatlinburg, just rebuilt after the fire, want to list with air b and b--can you tell me where to start to find out where I find out what all taxes etc. we have to collect and if you are with air b and b do you have to get that tourist residency sticker and all the inspections that come with it?

Olivier421
Level 2
Honolulu, HI

Airbnb should directly collect and reverse  the tax. By this way all the host will Be in the same fair price level regarding the tax. In Hawaii the governor reject the offer from Airbnb 

Drew66
Level 2
SF, CA

I have exactly the same problem in Mexico, but worse as a lot of hosts just avoid tax and therefore I'm forced to compete with tax cheats and pay the guests IVA (VAT) taxes because I can't itemize it.  Airbnb just do this so they can force the hosts' price down so they win more business.  Totally unethical.