Getting AirBnB to add a new local lodging tax

[Deward0]

First post here, wondering if anyone else has attempted to get AirBnB to add a new jurisdiction tax? Our County just imposed a 10% lodging tax and I would really like for AirBnB to add it to the current state tax they collect and pay. I have added it as a custom tax and they are charging guests, but it is going to be up to me to administer and file the tax. I have spent hours on the phone and with email, trying to get them to add it and they just keep running me around in circles. They finally asked me to send them a bunch of information, including GPS coordinates, the URLs of my listings, and documents from the jurisdiction validating the new tax. After several days I got an email stating that the would add the tax when they are contacted directly by the jurisdiction. I then asked why they instructed me to submit all the info and docs before if they were going to wait for the county to contact them.No reply.  I then asked what info they would need from the county and how should they submit it. The tech said have them email me.  ARRGHH. Their support documentation clearly shows other local jurisdictions that have been added all over the US, so now I am waiting to hear back from the county  anyone ever needed to do this and had any success?

[Lorna170]

@Deward0  It is entirely up to AirBnB to establish a relationship with your local tax authority.  No prodding on your part is going to do it.

Quite honestly, it is annoying to me that AirBnB collects my taxes from my guests.  I still have to file all of the required monthly, quarterly and annual tax paperwork, and each tax report has to go with a letter from my lawyer stating that the taxes that I owe were collected from the guests by AirBnB, were not disbursed to me, and are purportedly paid by AirBnB who DO NOT provide my tax information to the State, County or Municipality NOR will AirBnB provide me with ANY proof that they have paid the taxes that I owe.

Be careful what you ask for....

[Deward0]

Where are you located? 

[Helen56]

@Deward0  @Lorna170   It seems to be different depending on where you live, and the relationship that Airbnb has established with your city administration.

I live in San Diego, CA.  Airbnb collects our 'transient occupancy tax' TOT from the guests and passes it on directly to the city admin, I never see that  money.  However, the city does not say that I owe these taxes as it does for Lorna170, I don't have anything to do with it.  It sounds like Lorna170's city has a different relationship with Airbnb.

I can see exactly how much TOT was collected from each guest on the Earnings page. So far there has not been a problem, so far 'touch wood!'

It seems that Airbnb just sends the city a large lump sum and I don't know if it's itemized per host.

@Deward0 You could try bringing this up at your next city meeting - tell them they are more likely to get these taxes if Airbnb can collect/send them;  surely many hosts don't bother and your city would therefore get more money if they had a tax relationship with Airbnb.  Many hosts in your area might not even know about these taxes!

[Lorna170]

@Helen56   I find it interesting that you do not have to file tax returns on your rental income showing that the taxes have been paid.  What do you do on your 1040?
.  

[Helen56]

@Lorna170  Yes!  I DO FILE  tax returns on my Airbnb rental income!! Of course!!  It's always on my 1040.

However, I have nothing to do with the TOT that Airbnb collects and remits to San Diego city administration.  That is a local tax that the city collects and it has nothing to do with me.

I never said that I don't pay tax on my Airbnb earnings.

Just to clarify:  TOT, 'transient occupancy tax'  has nothing what-so-ever to do with federal income tax returns 1040.

[Lorna170]

@Helen56  So when you report your gross income for your rental property, you do not show the (TOT) taxes that have already been paid on that income on your schedule E?  I will have to speak with my tax accountant about that.

I do not believe that the relationship AirBnB has with the local tax authority precludes me from the obligation of reporting my property income and paying or showing who paid the taxes owed.  

I wish you well.

[Deward0]

Lodging tax is not income tax. Rental income is reported and paid to. The state and/or local jurisdiction, not the Federal Govt. 

when you file your federal business return, of course you report your income, and any and all business related expenses that impact that income. Including local taxes. 

I just want AirBnB to not only add and collect the tax at time of booking, but also file and pay the state and local jurisdiction. The y already do this with the state tax. 

On my books, I show the rack rate the guest was charged as income, then deduct tax and the booking fees, just as I do with all other business expenses. I do not submit any affidavits as to who paid the tax, certainly not required and seems excessive. We are a C Corp and to my knowledge there is no obligation to or even a place on the return to specify who filed and paid the tax. 

[Helen56]

@Lorna170 TOT taxes that Airbnb collects and then sends to the city are not my earned income and never even pass through my bank account.  

So there is no reason to report it on a 1040.  I report all the income I make on Airbnb, but there is no reason to report any taxes that Airbnb collects from guests, that has nothing to do with me.

[Nash-Cottages-LLC0]

@Deward0 Great to see someone from Dadeville, AL on the platform. 

We can share our experience regarding the evolution of how we handle our state hotel and local occupancy taxes since we began hosting in Nashville, TN. Initially, we were responsible for collecting this fee ourselves, followed by filing and remitting these taxes on a monthly basis.

Over time, due to increasing political pressure, Airbnb negotiated with our state (and local county which is a combined city/county gov't) to undertake the collection of taxes on behalf of hosts, streamlining the process significantly.

This initiative also empowered our local area, Nashville, to enforce compliance among hosts who, unlike us and many others, were not fulfilling their tax obligations, disregarding local occupancy laws, or lacked proper occupancy permits. The outcome has been beneficial for ensuring adherence to regulations. Perhaps a similar process is underway in your area and you're not aware or you can try to help initiate one, if that's what you would like to do. We recommend reaching out to the appropriate county tax agency. Doing so may show your good faith effort to comply with the regulations. 

[Deward0]

Thanks for your input.  We. It our STR teeth in the Nashville market as well, then finally jumped ship in 2018 as downtown just got too crazy for us. We also lived in the building that we rented space in and when we bought in 2004 the Nashville charm was what attracted us to buy our building on 2nd Ave. (Should have bought more old buildings in downtown in 2004!! Ah well) we used VRBO exclusively at that time and they did collect all the state and local taxes, but just passed them through for filing. We started using Avalara, now My Lodge Tax to do our filing. Turns out the issue down here is a moot point. We were able to add a custom tax that AirBnB collects and passes thru. Avalara just added that local tax to the airBnB filing and they pay it to the local entity for us. So all is well! If you ever wanna escape the madness up there, come on down and Glamp with us at thedestinationglampingresort.com