New Airbnb taxes in MA

[Jane89]

What are Massachussets hosts doing about new taxes on hosts?

[Anne226]

@Alicia242 I spoke with an Airbnb rep about this who did not see any activity yet for MA UI. She confirmed it’s their responsibility and that hosts will be notified once implemented. I’ve only noted the new MA tax law in my listing house rules and that tax collection is to be determined. I am going to relax about it and wait for ABB updates. 

[John47]

@Alicia242 and @Anne226 
Did you see the recent note that I discovered that If you're a B&B "home" (3 or less rooms in private owner occupied residence, and serve breakfast), you're likely EXEMPT from the STR tax! I have contacted Rep Sarah Peake office for clarification as was quite surprised when another host mentioned that carryover exemption.

[Anne226]

@John47, where is this exemption noted? Can you provide us with a link? 

[John47]

@Anne226 
See Chapter 337 of MA laws - I don't have link handy but from that law, here's the applicable definitions:

“Bed and breakfast establishment”, a private owner-occupied house where not less than 4 rooms are let, a breakfast is included in the rent and all accommodations are reserved in advance.

“Bed and breakfast home”', a private owner-occupied house where not more than 3 rooms are let, a breakfast is included in the rent and all accommodations are reserved in advance.

“Short-term rental”, an owner-occupied, tenant-occupied or non-owner occupied property including, but not limited to, an apartment, house, cottage, condominium or a furnished accommodation that is not a hotel, motel, lodging house or bed and breakfast establishment, where: (i) at least 1 room or unit is rented to an occupant or sub-occupant; and (ii) all accommodations are reserved in advance; provided, however, that a private owner-occupied property shall be considered a single unit if leased or rented as such.

[Pat338]

@John47 

Yes, I've been a fully licensed, inspected, insured, ServSafe certified ... Bed and Breakfast home for going on 9yrs now.  I only began listing on Airbnb recently as I was losing so many guests to the platform. I read that Technical Info Release TIR 19-3 leaves the exemption in place for Bed and Breakfast homes.  I have contacted Airbnb because I noticed they are beginning to collect from my future guests.  I've read them the law and exemption and they don't have a clue as to how to respond.  I wonder what the tax man will think I don't collect tax from guests coming through my personal website, walk-in's and phone reservations but Airbnb guests get taxed.  Isn't that gonna look a little strange.  Not sure what to do about it.. Please share any info, many thanks!!

[Alicia242]

@John47  YES I did see it but it sounds to good to be true and I wonder if continental brkfast counts?! Please LMK and Ill check w my State Rep Paul Tucker. Although noone seems to have a clue about anything pertaining to Airbnb.... Also what if you charge extra $ for breakfast. I used to put out a solid continental breakfast and many times guests would go out instead so... but if I can be exempt with my one room rental in the home and space I live it that would be GREAT! Thanks for letting me know of this possibility 

[Alicia242]

@John47  Oops missed your entire post above sorry... I just reread all

[John47]

@Alicia242 
The two legislators who would/should know most are Rep Peake and Sen Cyr as they were the co-sponsors of the bill. I suspect there's some langauge in there that NOBODY can explain based on what I've read/heard thus far! 

[Alicia242]

Thanks for sharing and YES It is 100% their responsibility but they are waiting til the last min to start collecting in retaliation to the lawsuit with Boston and its not fair to the states airbnb hosts! Its a major inconvenience if they thing we are suppose to collect the funds...I AM NOT COLLECTING taxes from my guest that book post Jan1 2019 for any travel post July 1 2019 which is when the new tax law starts. Airbnb can get on the ball and add the key(button) that they have on many other states listing . I am going to relax too!

[Allison160]

This is all so confusing. I have two questions:

Am I correct in assuming that the new tax applies to the following:

- booking fee guest paid to AirBNB

- cleaning fee

- 3% service fee charged to hosts

And, where can we find the amount of the booking fee paid by the guest to AirBnb? I have searched high and low and cannot seem to find it for any given reservation?

[John47]

@Allison160 
Yes, the tax applies to all of those though the 3% CC/service fee is a bit tricky, in one way.  Because when you charge tax on the normal rent+cleaning+booking, by default you're including the 3% in the taxable/taxed amt - but - because the 3% is going to get subtracted, it's possble that your payout will be reduced by slightly more than 3% as the state wants the gross amt of tax that was charged, not the net, so the difference may come from your portion.

As to booking fee amt, AFAIK once the booking is made/completed, that amt isn't available. I see it when I'm going to make a special offer but not sure where/when else.

Now - as you may have read elsewhere in this thread (and you should read the ENTIRE thing), it's my reading of  the law that ABB is going to be required to handle the taxes so we should only have to verify it and not charge it. 

[Allison160]

Thanks, John! That’s helpful. I’ve been stalking this thread for a couple months now, hoping that AirBnb would create the infrastructure to charge the appropriate tax at booking. But here we are on the verge of April and still, nothing. I have gotten a few bookings now for July and beyond and at this point, I’ve added a disclaimer to my listings regarding the new tax. This whole thing is super frustrating though. If Airbnb doesn’t get its act together and charge the tax at the time of booking, how are we even supposed to know how much total tax to charge guests if we don’t have visibility into what the guest booking fee is? 

[John47]

@Allison160

Hey, I'm just trying my best to help with what I've learned from reading law (presuming you've read it also?) and other sources. I really am not sure how ABB will handle it for existing bookings that guests may believe are fully paid for but are now going to owe taxes as well. Hosts shouldn't be responsible for collecting it and it shouldn't have to come out of our payouts either.
And I haven't seen any recent updates to MA DOR FAQ page either that I can see.
I think the few bookings I have gotten via ABB have all been via Special Offer so I'm thus able to see and adjust my pricing to get the booking fee to be what i want it in some cases but also know what they are being charged.

Addendum: I just checked DOR and if you're in Mashpee your loacl tax is 4% so at least you're not as bad as Barnstable or P-Town at 6%.

[Tatyana29]

Several months ago I had extensive talks with customer service reps at Airbnb who had absolutely no clue about what is going on in MA. I was also told at that time that there is some sort of algorithmic wizardry that applies to how booking fees are determined - and it is different from guest to guest. I couldn't get a straight answer. Sounds like it's ripe for a discrimination lawsuit if you ask me. Anyway, at the time I was told that the guest booking fee can be as low as 3% and as high as 20%. WTH?! I don't think the service fee should be taxable - that doesn't sound right.

[John47]

@Tatyana29 
I believe that booking fees are on some sort of a decreasing scale so that longer and/or more expensive rentals will get slightly less percentages and still allow them to make desired fees. 
Mine have averaged in the 12% range. 
The reason it's taxable is because it's part of the rent though with ABB, it's shown separately to customer. If they book a hotel via Expedia or such, the hotel is charged a fee for that but guest isn't aware of that being part of their bill but tax is still charged on the total 'rent'.
They are also taxing cleaning fees to avoid the "$15 rent + $150 cleaning" tax dodge.