Massachusetts New Guest Tax???

Answered!
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.

View Best Answer in original post

161 Replies 161
Megan517
Level 2
Massachusetts, United States

Can someone please help? I am a renter and just stayed in Truro, MA for 4 nights at a place listed as "entire place." It was part of the entire house at one point but door connecting the rooms is now locked (by a simple lever... we didn't know at first and opened it, LOL) and has its own separate entrance. It was great! The host is now requesting $92.13 from me. I completely understand how confusing these new laws are making everything, and I don't want to make things difficult for her, but I feel very odd having to now pay for that. How is it proved it was for taxes? And after reading the threads that it should be collected by AirBnb, not the host, I'm not sure what to do. I'm not even sure how it added up to the $92.13. Any advice would be appreciated. Thanks in advance!

@Megan517 
Couple of questions:
1) When was the stay booked? Because it wasn't until recently that Airbnb FINALLY started to collect taxes as they should have been doing MUCH sooner. But that's not your fault nor responsibility.
2) Did you see any breakdown of charges that would show the fees and taxes when you booked?
--
But in any case, it's NOT up to the host to collect taxes for any rental that was paid thru Airbnb. If Airbnb failed to collect it before, I can see possibly them doing it later but it's definitely NOT the host who should do it. If you want, I'd be willing to be in contact with your host to try and help as I'm sure that Airbnb support is still rather clueless on this complex issue. You can also contact me  directly if you wish. I'm easy to find on the web.

John,  AIRBNB told some of us that we had to collect the tax from the renter until they figured this out.  And they told us in the interim that we could add the ta x as an additional fee or feature to get the $$.  So now we have a renter that we have the tax funds, and another where we collected the tax as an additional charge, so they will probably add that to the taxable amounts.  

Is it possible that airbnb will bill then renters that didn’t get collected from ? 

 

Is it possible that they can debit the host or hold back future rents to resolve this ?

 

it would at least be constructive if they shared the info they reported on our houses.

 

it looks like the most popular form at Mass DOR is going to be the amended short term rental tax form.

@Marcia283 
If they told you to collect it, they were totally incorrect as law specifically and clearly requires and intermediary like Airbnb to do it, NOT the host.
How Airbnb plans to handle the taxes they should have collected and didn't is certainly TOTALLY THEIR problem based on my emails with Jen at DOR.  If they don't get it from guest somehow and pay it themselves, DOR may not care as long as they get the $$$$.

John47
Level 9
Chatham, MA

So - I just made my first payment to Mass Tax Connect for my direct July rentals that were subject to tax.
I was able to make arrangements with many of my repeat guests prior to Jan 1 so they could escape tax for this year at least.

Hi John!  Was this tax you collected from your rentals directly? Are you listing your rentals on the Mass Tax Connect booked through Airbnb and waiting for Airbnb to pay the tax on your behalf? Just trying to figure out how our individual acct gets 'credit" for taxes paid by Airbnb. Airbnb told me they pay as one lump sum for all renters. 

John47
Level 9
Chatham, MA

Highly suggest everyone (who hasn't yet) read this page which tells intermediary like Airbnb what they must do and not do as related to us as operators:

https://cciaor.com/news/dor-issues-expanded-guidance-on-intermediary-responsibilities-on-short-term-...

Rona-And-Michele0
Level 1
Barnstable, MA

There is an addendum to the Massachusetts Lodging Tax passed in January 2019 by Governor Baker.  If you are owner occupied and have 3 units or less and provide breakfast.  You are exempt from paying the lodging tax.  

I have spoken to Airbnb about this several times and yesterday I wrote a letter to their legal department discussing the new change.

I suggested to them that they send an email to all Massachusetts Airbnb customers  and create a way that these hosts will now be exempt from the new 2019 lodging tax.

I suggest that all hosts that fall into this category contact airbnb and create some noise regarding this issue.

I spoke with the Mass. Dept of Revenue yesterday to confirm that the information was correct.  I suggest anyone not confident contact the Mass Dept of Revenue at Mass Tax Collect.  617-887-6367...By eliminating the lodging tax it would be so much less expensive for the guest.

@Rona-And-Michele0 
It's my recollection that this exemption (which existed before this new law) was part of the original bill passed on Dec 28 and also requires that rental units be contained within the owner occupied home.
There's also NO definition of what 'breakfast' consists of so, based on ESA Hotels Grab&Go, it could be prepacked muffins, granola bars, and coffee!
There's currently NO provision on Airbnb to flag a listing as qualifying for that, and I'm sure that DOR is working with them to fix this based on some emails that I've had with DOR.

Rona-And-Michele0
Level 1
Barnstable, MA

Hi John,

wantd to let you know hat Airbnb was not aware of the exemption regarding owner occupied and breakfast.

i have spoken and composed an email addressing this issue and how to respond solve it

which has been sent to the legal team  of Airbnb.  I was informed that they would get back to me

 

thanks for your comment.

 

Rona

 

 

 

 

 

 

@Rona-And-Michele0 
I suspect that some people at Airbnb knew of the exemption but maybe not everyone as a couple of my emails with Jen @DOR (she's the lead person on the implementation of this, and is apparently like 2nd-3rd in command there) discussed how they were not yet handling it properly.
Having the DOR act as enforcer seems to be a good approach to getting their attention.
Airbnb has had a well known history of not getting info to the CSR's who deal with hosts re this tax.

Addendum/update: This type of exemption needs to be host selectable because ABB doesn't have enough info to know if host qualifies or not, and if host says they do and aren't, then as I understand it, the host is responsible for paying the back taxes due even if they didn't collect them from guest.

Rona-And-Michele0
Level 1
Barnstable, MA

Hi John,

Thanks for your message.  I will continue to follow up with Airbnb and keep you in loop.

This Dora is she part of the legal team with Airbnb?  If you want to send me her email

i will also create more noise regaarding the exemption.

 

i agree with you Airbnb is not very responsive to solving this issue.

 

Regards,

 

Rona

 


@Rona-And-Michele0 wrote:

This Dora is she part of the legal team with Airbnb?  If you want to send me her email

 


Umm..Huh? Who? I was referring to Jennifer DeSimone at MASS DOR who can be reached via desimonej@dor.state.ma.us
She's the one who's in charge of the DOR team that's working/trying to implement this in spite of failures by other websites like Airbnb/VRBO/etc.

@John47 

Jen's official title is Problem Resolution Office Director of the Taxpayer Advocate, phone number 617-626-3833. 

 

You might find the article below interesting John. Airbnb is not quite as "cooperative" with local governments as it likes to make out, when it comes to collecting and remitting taxes. 

https://www.wired.com/story/inside-airbnbs-guerrilla-war-against-local-governments/amp

@Susan17 
Thanks! I didn't know her title but when I spoke to Randy Hunt (a MA state representative for upper Cape Cod) via a radio talk show about a month+ ago,  he knew her and/or who she was.

I talked to her at least once back in Jan but she's SO busy that email is the preferred method plus it leaves an audit trail that helps protect us in case DOR has issues with our filings.