Can you raise your prices by the tax% ??
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Good to know (but sorry for you). So far, I have been just sucking up the 7.2% tax until I see other listings in my city charging for the tax. Right now, I havenāt been getting any new bookings at all (!) so I will not raise my prices to absorb the tax until next spring.
I would never stay somewhere that collected taxes in cash. Thatās not a judgement of you or your listing; I donāt your know your situation. But it gives off a completely unprofessional and sketchy vibe to me.
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Thankfully, Airbnb has started collecting the 14% Transient Occupancy Tax in Los Angeles, CA. I used to pay it out of the booking amount. One of the things Iāve discovered as an Airbnb host is that in a lot of other countries the price you are given for a purchase is the total price with all taxes included. The fact that in the U.S. we add taxes on top of the price gives many foreigners sticker shock.
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Hi Seabird,
There have been multiple threads on this forum about taxes and collecting them. Since Airbnb does not collect them for me, how exactly else am I expected to get them? If I roll it into the price I make a lot less money and my prices are already very low. Hotel tax is 15% in my market.
Edited to remove a confusing comment.
That doesnāt really make sense to me. It is an expense so you should not pay income tax on that amount.
What am I missing?
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You roll it into the price and do your best to manage. Itās an Airbnb problem, and a challenge that Iāve faced with my listing as well. The local taxes are pretty rough. Regardless, demanding cash is weird and, as you have experienced, will rightfully lead to less booking. One of the biggest benefits of Airbnb is the streamlined system that gets rid of shady host/guest payment issues.
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Precisely! Thereās no record of it, unless of course you write some lame receipt.
Hi smtucker,
The tax numbers break down differently depending on how it is collected.
For instance, if you make $10,000 a year on Airbnb and get the guests to pay the taxes, then you collect $1500 for a 15% tax rate and you keep the whole ten grand. But, I donāt think you can expense the taxes, since they were collected and remitted rather than being income.
If you roll the taxes into the price and use what I call backwards math, then when you get $10,000 you keep $8695,66 and send $1304.34 to the tax man. Then you can expense the taxes because it came out of the income.
So really you pay less federal taxes (my bad math, sorry), but then again, you earn less money.
This whole issue has been confusing me since I started. Iām thinking of just rolling the taxes back in, but I canāt raise my rates - the market wonāt bear it. I went from $41 to $46 after I put in $4000 worth of granite counters and my bookings fell off right around the same time (we were going to put granite in those bathrooms anyway, so I didnāt just do it for Airbnb. I just did it sooner)
Repost from another thread:
I think the word āillegalā is not 100% accurate for a lot of municipalities around the world, as āillegalā implies breaking the LAW. A lot of places you are simple violating a city code/ordinance that has been on the books for decades, and doesnāt make sense in the new world of home sharing. The punishment also being a written warning, or not punishment at all to the homeowner and certainly no punishment to the guest. On the flip side you have place like Barca where it is actually ILLEGAL and host, guest, and ABB can all get fined, etc.
I know this is pie in the sky request of guests, but shouldnāt the onus be on the guest booking to determine what type of accommodations they are staying in, and the legality of the accommodations. Granted some hosts lie, but if you are traveling to XYZ city and you start looking at listings and some say āLegalā and other donāt say anything. I would think, hmm, maybe I should look into āhow illegalā this is, like am I going to jail, or is the host just going to get in trouble. If the later, I would be fine, the host decided to take a risk, and thatās on them.
I donāt believe there are TOO many places where the Guest is directly punished or even removed from the listing. Would love to know if I am incorrect thinking this!
No one gives a damn. I live in Seattle. Everyoneās out for the best deal possible for themselves and most guests like most hosts donāt have a clue to whatās going on regarding taxes and insurance (I know I sure didnāt when I first listed a room).
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And yet you booked there anyway.
Nope. In both cases the instructions to lie if asked who I was appeared in the paper house manual, which I didnāt see until after check-in.
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[quote=āGarden1Gnome, post:37, topic:8331ā]I
was appeared in the paper house manual
[/quote]
I hate when hosts do that! That was part of the problem with the really bad host in Italy ā all of her house rules and extra charges where in the house manual so she said we agreed to all of that when we booked, when of course, I didnāt agree to any of that stuff since I didnāt see the house manual until AFTER we booked (and had to translate it because it was all in Italian, and her description was all in English). Geesh.
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This has turned into an interesting discussion, and Iām thinking perhaps I should have titled the thread with the words āin complianceā instead of, or in addition to ālegalā.
I would be very annoyed if a host asked me to lie to anyone about who I was or why I was there. Also, the type of host that would do this would also not put verbiage in their listing, so by the time you knew you were expected to lie, it would be too late. Such a host would get a not so good review from me.
I have no idea if other hosts in my area are in compliance with local licensing and/or code, or if they are paying the STR taxes they should be. What I do know if that several of them certainly appear to be breaking the terms of their leases and/or condominium terms. So, Iām also wondering about adding verbiage to my listing that tells guests they donāt need to worry about things like that in my house. Part of the motivation here is to maybe alert/educate guests to the fact that some hosts do this.
Agreed, @Robert_Dudley! @ellil comment makes no sense at all. None. Small B&Bās - one room B&Bs - are owner-owned and operated. Not a faceless business, whatever that is. Hey, you canāt argue with someone who thinks couchsurfing.com is a stable and legitimate way to travel for everyone. But if ellil hurt his- or herself at the illegal, but facefull accommodation her or she might care if the owner has insurance.
Amsterdam, Berlin and I believe London are places where the guest is not punished but removed from the listing if the authorities visit the place and find the host to be hosting illegally.
Now your comment makes no sense at all. Are you really so myopic as to not understand the general publicās distaste of big business, that they are embracing AirBnB because they get to deal direct with human beings? One-room B&Bs are exactly this, they are human entities, not big business. Itās not the one-room B&Bs that AirBnB travellers are deserting.
The Hilton, or the Sheraton, or pick your big name hotel, is faceless. Itās a corporation. Nobody that you see during your stay owns it, or really cares about the building or your stay on a personal level. You donāt get a personal touch. You get a corporate business transaction. Thatās the polar opposite to the AirBnB experience.
And donāt presume to tell me what I think of couchsurfing, thanks very much. I have never made a statement in support of it, so I donāt know why youāre making up lies about me.
Back to the original question. I would say, yes, guests SHOULD care whether a host is legal. We had a poster come here crying the blues because, according to her, the new city regulations forced her to shut down. When we pressed her, it was actually because she was a renter busted for subletting! She had to cancel 18 reservations! So 18 poor guests had to find some other super host in Santa Monica because this person was taking a big risk every time she accepted a booking. Finally her landlord found out and made her stop. And she blamed a mysterious ācity regulationā for it.
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I collect tax in cash. Itās never been an issue and no one has accused me of being sketchy. Our governor vetoed the bill allowing Air to collect because there are still so many issues with illegal rentals in the state. But it will probably be reintroduced next session.
If I roll it into my rate, it will always pyramid. Not feasible.
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