Massachusetts New Guest Tax???

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Ken-and-Kathleen0
Level 2
Pittsfield, MA

Massachusetts New Guest Tax???

AirBnB collects and remits taxes in 40+ states, PR and the US Virgin Islands, but for some reason, the tax they were a proponent of in Massachusetts is not even mentioned.

 

There have been no updates by AirBnB on how they are going to help their hosts handle this tax which according to the State information includes all fees cleaning, and service (AirBnB Service Fee?) and the Security Deposit.

The bulk of Massachusetts AirBnB revenue in Massachusetts would have to come from Summer Rentals in places like the Cape, Martha's Vineyard, Nantucket and the Berkshires. 

Without some sort of resolution, or at least notice from AirBnB we're faced with either eating the tax, reporting costs, etc. or just cancelling all of our summer reservations. 


1 Best Answer

@Julie1751 
1) Airbnb doesn't require permission to remit tax because they are required by law to collect & remit as they are the intermediary.

2) You as host as still required to register with Mass Tax Collect for other parts of law and should you get a rental directly (maybe a repeat guest?), you'll need to collect/remit it.

3) They are (as i understand it) doing the payments in 'bulk' without any linkage back to individual hosts.

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161 Replies 161

@Tim808

I think you might want to get some screen shots or such that show the correct and error calcs and send them to Jennifer at DOR via desimonej@dor.state.ma.us so they can possibly pursue it with Airbnb.

@Jamie365 

I completed the DOR process this week and registered as an "operator."  My understanding of the definitions as provided is that the "intermediary" is the person or entity who collects or receives the tax...in my case that's airbnb only.

 

The only thing I don't understand and am concerned about is some language on the DOR site that appears to say both the operator and the intermediary are to file returns and pay the taxes...this begs the question, Who is responsible for fines, interest, etc. for failing to file or filing late?

If the $$ is going directly to Airbnb and not to us...I hope we don't get stuck. 

 

Who is required to file returns and pay the taxes due?

Generally, all operators are required to collect tax from the occupant and remit these amounts to the Department. An operator may enter into an agreement with an intermediary for the intermediary to collect rent. An intermediary who agrees to collect the rent will also be responsible for collecting and remitting the related tax.    (from MA DOR website)
 

@Mary105I would have replied sooner but Friday is my turnover day so was busy most all day and then had unplanned nap this evening.

Anyway, as to your concern: No, while it does appear that both operator and intermediary are required to pay taxes, but rather what it DOES say that whoever gets the money FIRST from tenant gets to pay the tax. If you rent directly and get paid rent, then you get to pay the tax. If you pass the responsibility to Airbnb to collect the rent payment, then THEY get to pay the tax. And I hope by now, you saw the quote from Jen at DOR re it being Airbnb who will be ultimately responsible for tax on any rentals done thru them, (but it may take them a while to get their act/'bleep' together, ok?)      

@John47 

Those turnovers can be tiring especially with in this humidity!

 

Thanks for your reply...yes, I did see the quote from Jen at DOR.  I was thinking that things sound too simple (me of little faith).  Guess we'll just have to wait and see if there are any kinks in the process.  

@Mary105 
Given the amount of money potentially involved, it makes sense that DOR would go after Airbnb as easier single target than us as multiple individual hosts if they haven't complied, right? Especially as they had months to prepare for it! Not sure how they will collect from guests who have already paid and stayed and departed so far in July but that's for DOR and lawyers to deal with. I feel that with Jen's reply, we're totally 'off the hook' as someone said she's like the second in command or close to it at DOR.

@John47 

I understand what you're saying and will keep up with how this all plays out. 

Karen1434
Level 2
Wakefield, MA

I hope Airbnb is the one responsible to pay the tax if they don't collect because they are the one causing the problems for me as a host and it looks like the same is going on for those in this thread. No matter how prepared I was, Airbnb was counter-productive. I keep getting different answers from them. As of a couple months ago, I was to wait until after July 1 for them to start collecting the tax on reservations booked without the tax added. Now they are saying it's my responsibility. They told me to open a resolution claim to get the money. Even if I told my first s.t. rental to expect to be charged, they called Airbnb when I sent the resolution request after they checked out, and Airbnb actually told them not to pay the tax. Why???? I cannot get a supervisor to call me back, and the agents answering the phone haven't a clue about this. I'm really not sure what to do, but really don't want to be responsible to pay this tax out of pocket. 

@Karen1434 
If you've not read it yet, see my reply to Greg 31 (about the middle of page 4 here) with the quote from Jen at DOR.
I  would suggest NOT contacting Airbnb because they are (IMO) clueless and also do NOT try and collect tax yourself for ANY Airbnb rental. If you need help, contact Jen at desimonej@dor.state.ma.us because she's the lead person on this issue. I had specifically asked if we were 'on the hook' if Airbnb screwed up, and her reply is what I referred to, ok?
We are ONLY responsible for any tax on rent that we receive DIRECTLY from tenant/guest via cash/check/PayPal/etc.

Kim1029
Level 1
Salem, MA

Hi everyone, forgive me if this has been answered, but I did not seem to find any comments....

 

As of today, anyone booking my property sees the appropriate occupancy tax as a line item. However, I have several bookings that were made in June for July, August and Sept. When those guests booked, there was no line item for taxes within the airbnb process. Should I file a tax return myself and pay the taxes based on those bookings since no taxes were collected? I realize going forward that airbnb must take it from here (i.e., any booking where they collected tax, they now need to file/pay MA). But since we are liable for taxes on stays starting July 1, 2019, should I be filing returns and paying relevant taxes as an operator to cover these advances bookings where taxes were never collected? 

 

Thank you, Alex

@Kim1029 No. Review the posts [very helpful posts, I should add] from @John47 on both this thread and another one. AirBNB and the DOR have to work this out. It is not up to the hosts to file for the reservations that had no tax.

@Kim1029 
As @Susan151 said (and THANKS to her for the compliment!) : It's Airbnb's problem, not ours, and in one/more of my prior posts, you'll see the quote from Jen at DOR confirming this.
They may have to collect from prior guests and if so, it's not your fault nor problem.
You as host are ONLY liable for taxes on rent that is paid DIRECTLY to you, not via any intermediary like Airbnb/VRBO/FlipKey/Real estate office, etc.

Thanks for all your input, John. We have guests here now – I disclosed the tax that should be paid on arrival in the listing, as well as in the welcome letter… They have not paid it, and I am uncomfortable chasing after them for an additional hundred dollars. You were saying that as long as they pay rent through Airbnb, there is no need to collect the taxes?

@Wendy800 
You're welcome! And - correct, as long as rental was made/paid via Airbnb, it's up to Airbnb to handle any taxes, not us.
I'll repeat the portion of my prior post with Jen's quote:
You as host are NOT responsible for taxes on any Airbnb rental, THEY are.

In email from Jennifer DeSimone (MA DOR), she wrote: "The intermediary ultimately are the ones responsible for the taxes collected and reported, not the hosts. I will let our legal folks know about this and see about reaching out to Airbnb but again. This is probably going to take some time for everyone to settle in."

In response to my final point on email to her regarding incorrect tax handling, where I wrote:
"Hopefully this type of thing won't affect us because if they are supposed to charge tax and don't, us as hosts don't want to be held responsible for their mistakes!"

Thanks for everyone for the research done so far! We've been chatting with Airbnb support but don't have really high hopes.

 

It might be buried in here somewhere, but I'm not sure the best way to search for it...

Do we still need to register with the state to get an ID number?

And I'm assuming we don't need to file any sort of monthly report?

@Peter-And-Adam0 
Yes - you still need to register as an 'operator' for tracking purposes.
And as I understand it, you need to file a zero $ report for any months that you were open (you select that when registering if as seasonal only) and had all rentals via Airbnb or other intermediary that actually directly collected rent from tenant.