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Joined:
11/21/2017

Hi Everyone,

How do you handle sales tax with bookings that come in through AIRBNB?  I haven't looked at AirBNB in a while so maybe they have a provision for charging sales tax, I don't know.  But from what I recollect I think the fee you charge is just for the room.  I don't recall seeing anything for sales tax to be added on.

 

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Joined:
11/21/2017

I just checked my AirBNB reports and they are definitely not collecting tax.

Morticia's picture
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Joined:
05/22/2008

MNVineyardBB wrote:

I just checked my AirBNB reports and they are definitely not collecting tax.

You can add it to the text of your listing that, as a licensed property, you are required to collect x% lodging tax.

I always included that info in my confirmation. Room cost + tax - amount paid = balance owed at check in.

__________________

Most people die of a sort of creeping common sense, and discover when it is too late that the only things one never regrets are one's mistakes. - Oscar Wilde

 

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Joined:
02/15/2017

We used Airbnb for the first time this summer. They started collecting use tax for our state in July. The taxes they collect can be found in your account information. It's a bit obscure to locate, but it is there.

Prior to them collecting the tax for us, we made sure our account was set to have the guest "request to book". This required us to give "approval" to a guest based on their agreement to pay the state's use tax that we are required to collect. We explained that Airbnb did not collect that on our behalf, and that they could either book through our site directly, contact us and pay over the phone, or they would need to pay the tax upon arrival. The guests all understood and were agreeable. We collected it from a few and then starting with reservations made July 1st and after (when Airbnb started collecting and submitting the taxes to the state on our behalf), we just verified it in our Airbnb account.

If they do not collect for your state, the biggest thing is to make sure your settings give you the control to communicate prior to accepting the reservation.

PhineasSwann's picture
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Joined:
09/25/2012

We're dealing with our first air booking since our state began collecting room taxes directly from them. 

We're making the assumption that 1) Air isn't lying to the state, and 2) the state is collecting the correct tax.

Therefore, any air revenue we book is being reported as non-taxable income. 

__________________

Darren
Innkeeper & Owner

 

Morticia's picture
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Joined:
05/22/2008

What we all need to keep in mind is - if air is not submitting the proper tax, those government entities are going to come after us. Especially in places where there are licenses that can be revoked.

My state has no idea, zero, zip, nada if they are being paid correctly. Air sends a lump sum. Maybe they pay 100%. Maybe they keep a few % for their trouble. No one knows.

And, you do need to report that income on your monthly or quarterly or yearly sales tax report to your state. It goes under a non taxable category. 

Breakfast Diva's picture
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Joined:
05/26/2009

Morticia wrote:

What we all need to keep in mind is - if air is not submitting the proper tax, those government entities are going to come after us. Especially in places where there are licenses that can be revoked.

My state has no idea, zero, zip, nada if they are being paid correctly. Air sends a lump sum. Maybe they pay 100%. Maybe they keep a few % for their trouble. No one knows.

And, you do need to report that income on your monthly or quarterly or yearly sales tax report to your state. It goes under a non taxable category. 

I also have to submit the amount of Airbnb gross room revenue quarterly to my local and state. There is a separate form I have to fill out. My county and my state have the lodging taxes collected by Air. 

Mort is right though, that even with Air collecting my room tax, the state and county are paid in a lump sum and have no idea where those taxes are collected. 

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Joined:
02/09/2017

When we opened in May, Air was already billing guests 4.9%, which it remitted to the State of Colorado (that, in turn, forwarded 2% to our County).

Our City has a 5% sales & lodging tax.  We recovered that amount from guests indirectly via our $30 Airbnb Cleaning Fee.  If the City tax was, say, $14, I would record $16 as income, and $14 as local sales tax.

Fortunately, a few months back our City negotiated a deal with Air, so Air now bills guests the full 9.9%, we are no longer involved in tax collection for Air bookings and we also don't have to report these sums to either our State or City.  This arrangement is really nice.

__________________

Durango Jeff

 

Morticia's picture
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Joined:
05/22/2008

When you do the setup they let you know if they collect the tax for your state. If there is a local tax or tax on food they do not collect that.

I used to put the tax info into the text info. I always send my own confirmation with all the details if the guest still owes money on arrival.

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