Seattle/Washington Lodging Tax

Hosting in Seattle, Ballard for 3 years now. In Washington, the “occupancy” tax (called the Lodging or Transient Lodging tax) is collected by the state and remitted to the cities. I pay online via Washington State Excise Tax form. AirBnB income is reported as Retail income in the B&O section, and again as a Transient Lodging item later in the form).
AirBnB started collecting & remitting this Lodging tax 10/15/2015. These collected tax amounts appear in the AirBnB Host>Account>Transaction History>Gross Earnings. Some questions:

Answered most of this in reply post 01/25/16

  1. Several bookings arriving after 10/15/15 show a tax, others do not. Is this because booking (not arrival) was committed prior to 10/15?
  2. How do I find the initial commit date for bookings?
  3. Looks like the WA State Dept of Revenue uses a special location code (5026) for collection of this lodging tax in Seattle. Seattle location code for “normal” retail tax is 1726. Can anyone confirm that 5026 is correct code for AirBnB income?
  4. FYI, This year I plan to report to the state the total amount for only those booking payouts for which AirBnB did not collect the tax.

Any comment welcome.

thanks!

-B

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Called the Wa State DOR today. That location code 5056 is for hotels, etc with 60 or more units, so my one bed AirBnB uses the standard Seattle location code 1726.

I also asked how to handle reporting of AirBnB collected lodging taxes. Not so hard. I file online, assume similar on paper. On the state tax form show the total annual gross amount as retail in the B&O section and again in the Local Retail section, but use the deduction button and enter the totaled gross earnings of transactions for which AirBnB collected Lodging Tax (Look at your Transaction History>Gross Earnings to find and total the transactions with taxes paid by AirBnB). Use the OTHER deduction category - it’s at bottom of list. In the explanation box write this statement: Taxes collected by AirBnB per DOR agreement.

Seattle had a lodging tax rate change at end of Q1, so the local retail section of the state tax form asks for the Q1 total on one line then another line asks for the Q2,3,4 total.

Blah blah blah - call them or your accountant if troubled by all this.

-B

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I am filing online and have gone into the right categories (Retail, transient lodging) but can’t find the Deduction button. Can someone please explain where it is?

Thanks,

Ellen

Hi, Ellen - We just filed with State of Washington. Not so hard, after I phoned the DOR help line. This is my experience, so if you do this and it causes you future problems, I’m not a tax professional, so this is all in the realm of opinion and conjecture.

Some things to keep in mind:

  1. AirBnb collects and pays the sales and lodging taxes, but you are required to report the income.
  2. In previous years, you were supposed to report AirBnB in the Transient Lodgings area of the form (several screens into the online form).

Here is the procedure (this is from memory, not looking at the form)

log on to your DOR account and click the link to file your Excise Taxes.
On the screen for reporting income in different categories,find the Retail row (most of the way down)
Read the column headings one is for Gross Receipts. Click the white button/field (defaults at 0.00). Fill in the amount that you see on your AirBnB Host Account>Transactions >Last Year (or 2016). Exit the field.
Next column over is Deductions. Click the white button in that column and a screen for all the different types of deductions opens.
Use the Other row at bottom. Fill in the same AirBnB gross amt.
When you put an amount in the Other row, an Explanation box appears at bottom of screen (you may have to scroll down to see it).
In this box make a statement that “AirBnB collected and paid the sale and Lodging taxes for this” or similar.
Exit this screen and continue filling the other screens. Your AirBnB gross and deduction might auto populate in the screes for State Sales and Use Tax and City Sales and Use Tax. If it doesn’t, you have to fill it. Those two have a warning if the amounts do not match the Retail amounts and deductions in the first screen.
If you reported previous years AirBnB income in the Transient Lodgings screen, this years form and future forms will ask you to fill that screen again, and, since you now do not report AirBnB in this area of the form, it will give you an error at the end. Ignore this section of the form and the error (because you already reported in the retail fields).
Good Luck! Call the state DOR if needed. Be patient. They eventually answer.

-B

Thanks for the detailed info. I found the column and did as you explained but at the end it still told me I owe 10% of the income. Did you owe anything?

No additional taxes in my total from the AirBnB item. If you report a huge income from combined sources (AirBnB plus any other sources you report to the State), you might have to pay some B&O tax, but not the sales and lodging tax. It would not be 10% of the gross.

Sounds like you filled the B&O section correctly, but I’m guessing that you failed to fill in the deduction box in the State Sales and Use Section. Anyway, missing the deduction in either place would result in taxes on the gross amount.

Same procedure as B&O Section - fill the AirBnB income (it probably auto fills, so you don’t have to), find the deduct button, choose “Other”, find the Explanation box, make the statement that AirBnB collected and paid the Sales and Lodging taxes.

I can’t remember whether the Local Sales and Use Tax section has fields for this lodging income and a deduction button. If it does, same procedure.

Hope that works it!

-B

Another thought. The combined City plus State sales tax in many Washington State cities is close to 10%. Maybe you did not actually fill in the deduction amounts in the deduction areas of the form. This would cause a tax due of almost 10%.

Just to be sure. Each deduction area has 3 items to fill out:
a place to write the amount deducted (enter the entire AirBnB gross receipts amount)
a place to choose what kind of deduction you are claiming (for AirBnB receipts, you choose “Other”. It’s the last choice on the list)
a place to explain the Other designation (you enter a statement that AirBnB collected and paid the taxes).

Fill all 3 items in each section of the form that has deduction field. For sure the B&O section has deductions, and the State Sales and Use Tax section. As I said, I can’t remember if the Local Sales and Use Tax section has places to report and deduct the AirBnB receipts. Put em’ in if it does.

Also, do not report any AirBnB receipts in that Transient Lodging section, if it shows up later in your form. You already reported these receipts in previous areas of the form, and AirBnB already paid the taxes.

I’m not a tax professional, so if things don’t look right, phone the DOR help line during business hours.

-B

Thanks again for your detailed instructions. That worked, except in the past I had included the Transient Lodging section and this time I omitted it. (It told me I was supposed to but I guess that was based on past records.)

Best,

Ellen