Texas occupancy tax

[Cathy151]

How is everyone handling Texas Occupancy taxes for local districts?  Airbnb collects only for the state of Texas.  But I have to collect for the town of Surfside Beach 4%.  If I rent the house for $100 per night, I owe the state of Texas $6 and city of Surfside $4.  Before Airbnb was collecting taxes, I charged $110 per night to include the taxes.  If I charge $104 per night ($100 rental plus $4 for taxes for the city of Surfside), then Airbnb charges 6% for the state of Texas on the whole $104.  Does anyone have a solution to this tax problem?

[Walt3]

All:  It seems to me that revenue owner would be responsible for collecting and remitting the state and local taxes.  And there is no doubt that both the state as well as Airbnb beleives that Airbnb is the revnue owner.  As such, they are responsible for calculating, collecting, and remitting state and local taxes. So while Airbnb's website says "Airbnb then takes care of remitting collected taxes to the applicable tax authority on the hosts' behalf", that's not true at all.  

Hosts: You are not the owner of the revenue charged to and paid in by your guests; Airbnb is.  If the state,  local, and federal taxing authorities didn't beleive that, Airbnb would not send you 1099s nor would they collect and remit local taxes. 

On this basis, I think the case can be made that hosts aren't responsible for collecting and remitting any type of sales, VAT, or HOT tax -- at all. 

Does anyone disagree with this? Why?

[Matthew565]

Actually this is a really great point. It doesn't sit right with me that the added taxes are passed on to the host when the city and state are already charging taxes on housing in the first place. 

[Mike-And-Janet0]

I am new. I was happy to learn that air bnb would be taking care of the quarterly taxes. Now I am not so sure. It looks like the different jurisdictions need to contact airbnb to get them to comply. Following the discussion.

[Flora32]

Yes, Airbnb collects the state taxes but hosts still have to file a quarterly report.  If you have direct bookings and collect the 6%, then that would be included in your report.  Otherwise, if all of your bookings are through Airbnb, your report would be $0 for taxes collected.  And, you still have to collect (and include somehow) your tax percent for your town (Port Aransas is 7%).  My tax is included in the listed price yet Airbnb continues to tax based upon that listed price.  It was a poor decision in my opinion.  They should collect all or nothing.  Good luck!

[James284]

Can you help me find out where it says Airbnb hosts have to file a quarterly report to the State of Taxes about occupancy taxes collected by Airbnb? I just heard about that from you for the first time. Thank you!

[Don171]

                                                                                                                                                      File: AirbnblocalandStateTax

Compliant sent to Aribnb on 4/24/2019

TEXAS STATE & LOCAL OCCUPANCY TAXES (OT)                                                 April 24. 2019

REOMMMENDATION TO RESOLVE MAJOR COMPLAINTS RE: COLLECTING LOCAL TAX

Your handling of Local (City & County) Taxes is causing a major problem. Occupancy Tax in our area is 15% total. Our property is in Rockport, Texas. Airbnb does a great job of collecting and remitting to the Texas State Occupancy Tax of 6%.  But you are totally ignoring two “Other Local Taxes Totaling 9% that is due and payable to the City of Rockport and Aransas County. We as HOST have no problem remitting the additional 9% to the proper authorities PROVIDED Airbnb collects it on our behalf, just like they do the State Tax  and “Cleaning Fees” etc.

The most efficient method of resolving this issue is for Airbnb to automatically withhold the Total Tax Due of 15% from all Guest. Then, continue sending the 6% to the State and the remaining 9% would be sent to the HOST who would be responsible to remitting to the 9% to Local Taxing Authorities.

I understand the reason Airbnb is currently handling the State & Local Taxing issue differently. However, our GUEST are NOT HAPPY when they are ASKED when they move in for the additional 9% Local Taxes WITHOUT BEING ADVISED BY AIRBNB BEFORE HAND or if it is not disclosed in a Listing.  Then when we have to tell them honestly that Airbnb refuses to withhold for the Local Taxes, they get even madder.

Your Airbnb staff tells me to “Raise My Rates”, obviously they are not business people. Each time you do that two things happen. First, the Guest gets punished and ends up paying more rent money.  Second, they then have to pay more tax due to the increased rent. Third, a HOST’s listing becomes less competitive due to the increased daily rate. Plus, most of us have such small margin’s of profit that we cannot afford to absorb an additional 9%e

My Complaint is that first All Guest Should be Aware of the fact they will need to pay State and Local taxes and in total it will 15% in our area of the State.

Second, all Airbnb needs to DISCLOSE the Local Tax Issues Openly and up TO ALL INQUIRING GUEST so they are aware of the additional tax before they Agreed and Accept, the contract.

A Second Alternitive, just adding one additional line in the “EXTRA CHARGES” area of our Listings.

Example, under “Cleaning Fees” add additional line Item titled “Additional Local City & County”, then include the 9% total tax based on rental Fee, plus Cleaning Fees.  The extra Local tax that Airbnb collects (similar to Cleaning Fees) would be remitted to the HOST, who still has the responsibility to remit to Local Authorities. Those small changes would eliminate GUEST from having to be Blind Side and Argue with their HOST’S over the additional tax issue and acusing HOST accused of gouging.   

The above would solve ALL of the current Local Tax Collections Problems. It would advise the Guest Upfront of the additional required tax charges, enable the Taxes to be PAID upfront (since it would be added to the Other Charges and Collected by Airbnb). Resulting in Guest knowing up-front having review and accepting the contacts to their satisfaction.

Don Schieffer   Cell 571-236-8178   Property 1010 N Austin, St Rockport, Texas

[Janet165]

I agree and have requested that Airbnb allow hosts to add the local tax as a percent of the rental and other fees. HomeAway recently went to the same very bad option of fixed dollar amount fees only. I think the first company that steps up and provides an option under taxes to calculate and charge a PERCENT instead of only options for fixed fees will benefit greatly with increased listing. 

Airbnb, please add an option to charge an additional tax (a calculated percent) up front so the guests understand the full costs up front. 

Janet Groth 

westxchic@yahoo.com 

As a math teacher, raising the rates DOES NOT work mathematically.  That is not a viable solution. 

[Pete69]

Just raise your prices! That's what any business does when costs are added. If the city wants to scare off tourism then they are idiots. They might generate more revenue but at the same time they are reducing the number of tourists to the area. We have idiots here running the Los Angeles City Council too.

[Kimberlee2]

Hi Everyone, 

I am a host in San Antonio, and I am in a quandry as to how I should collect the HOT from guests.  It does seem a bit shady to me as a host to be asking for something 'after the fact' -- as we all know that many guests don't see added fees, such as pet fees, when they are booking, so I am assuming the same situation may occur with HOT.  

So, I guess this has been going on for a while, but as many hosts are discovering -- the Airbnb language and responsiblity is vague.  In certain situations vague language is used purposely, so that explanations have quite a bit of leeway if any legal issues arise.  

Also, does anyone know if we are responsible for HOT beyond the Feb. 11, 2019 deadline if the guests booked prior to that date?

Thank you!

I was actually hoping that someone may have put together a nice PDF or other piece of information on their listing to discuss the B

[Ryson-Vacation-Rentals0]

My email to our AirBnB rep:

AirBnB not offering an additional line item is really turning into a nightmare for property managers like us in areas that require the collection of local taxes.

This leaves property managers with the following options:
1. Request guests pay local taxes at check-in
2. Send a request as a resolution for the additional amount after reservation is placed
3. Eat the costs ourselves
4. Wrap into the rent and cleaning costs

We would probably never attempt either of the first two, believing they both cause unnecessary misunderstanding and confusion for our guests, causing a bad guest experience. Property management is hard enough as it is.

Property managers are already losing money to OTA's like AirBnB, so expecting property managers to eat these costs not only doesn't seem to be a good solution for your clients, it also creates a situation where clients like us are paying more than the contractually agreed upon amount, of currently 5%.

Ryson has decided the best option is to wrap the required local taxes into our rent and cleaning amounts, but this means AirBnB is charging us over the agreed upon amount this way also. My thinking is that this way is probably illegal, except for the fact that AirBnB will insist they have given us three other options as alternate ways to collect our local taxes.

With that all said, AirBnB is forcing property managers to do one of the two:
1. Cause unnecessary misunderstanding and confusion for guests, causing bad guest experiences 
2. Forces clients with required local taxes into paying more than the contractually agreed upon amount, currently 5%.

Ryson appreciates the partnership we have with AirBnB. However, one would also think AirBnB would appreciate our partnership in return, and want to honor it's contractual rate with transparent and justified pricing, just as Ryson attempts to do with our guests who book direct.

All of our other OTA's offer a separate line item option to build in our local taxes in order for us to collect as one would expect. AirBnB's lack of offering an additional line item for our local taxes, is forcing our bookkeeper/office manager to have to go in each month for our end of the month reports of an estimated 230 properties, line by line, to deduct, balance and modify the conflicting amounts and costing her an estimated two full days per month, as she cannot just assume AirBnB's flat service rate of 5%.

Please escalate the additional line item request as a high priority build. I'm confident Ryson isn't the only property manager who would really appreciate it, especially those of us with hundreds of properties in our inventory.

Our AirBnB rep's response (05/30/19):
The feature you requested for taxes is currently being built by our engineering team .

[James284]

My city recently notified me that it would now require me to remit local hotel tax for my spare bedroom and couch listings on Airbnb which go for $29 and $21 a night respectively.

After speaking with Airbnb support, I discovered I can add the local occupancy tax for each booking when I switch to using professional hosting tools in Account Settings. However, this removes the default *State* Occupancy tax Airbnb automatically remits to the State of Texas. Therefore, once I remove the default settings, I will have to collect and report the State occupancy taxes to the State of Texas myself.

In short, it appears to become complicated once a host has to collect local taxes. 

I cannot enable this custom tax without a business ID and a Accommodations number. I have neither. I need to find out from the City if registration for local taxes remittance comes with these numbers. I believe I may need to register with the State of Texas to get the accommodations tax number for self-reporting State occupancy taxes now.

It's getting pretty complicated for now. I plan to update when I get more info! Thank you all. 

Thomas

Tyler, Texas

[Cindy904]

Very frustrating, to get help , to get an answer from airbnb , they have topics on how to add the local tax but it is not available if you are not a third party , I just found that out after 6 weeks of leaving messages and pages of text and emails. They say you can ADD tax, but you really cant, you have to have them collect ti all for you and you submit both , you lose the option of them paying the state for you.

Cindy

Galveston

[Charity47]

@Cindy904 thanks for updating.  What do you think is the best way to do this?  We are new to hosting.

[Amy2082]

Well, here i am in 2021 reading this and apparently there is still no answer. 

SO i am going to make the likely futile effort to get an answer to the following question: For those of us who live in texas and have to collect local taxes, is the percentage (in my case 7%) determined off the total paid out to the host? Plain and simple.... that?