Taxes: Air should be collecting everywhere!

Didn’t realize that - they don’t in ‘Gorgeous Prince Georges’. ; )

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Rental income is OK… AIRbnb or STR is apparently frowned upon.

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I have filed a Schedule C every single year since I was 16. All of my income has been on a Schedule C and it will continue to be this way. Being self-employed means that getting any type of loan is harder than those working as an employee. You need 2 full years of an income that qualifies you for the value of the loan. In the perfect world, you have 10 years [rough guess] of tax returns that show that your income has been steady. You can simply not be carrying a bunch of debt. And you should have a really good credit score. It isn’t easy to qualify for a mortgage as a self-employed person, but it can be done.

I would much prefer to file my AirBNB income on a Schedule E for many reasons, but most of the CPA’s that I have read indicate that an AirBNB is active income, not passive, so that a Schedule C is required. [And that should really be another thread.]

I think Airbnb should be paying taxes on the money they make, ie: service fee. I am perfectly willing and able to collect and pay my own taxes, and I do. Since I list on a couple of other platforms Airbnb collecting in my area actually complicates my bookkeeping.

I do a Schedule C as well . And have every year for the past 25. My schedule C is for my writing business. My CPA did not want me to file another one for my Air. She said it didn’t qualify as a B&B because there was not room service offered and other things that make it qualify as a B&B. So I dunno. It’s fine.

Yea. I dunno either. I have read the code this way and that way and can’t decide how to do this properly. If I can find justification to file a Schedule E, that is truly my preference. I might have to consult with a tax professional, something I have avoided for my entire life!

They do in Hawaii. They collect it from the guest but it’s only one half of one percent. They qualify for the wholesale GE rate. GE is a tax goods and services and because it is such a low, broad and regressive tax, Hawaii is the only state that can get away with charging it. It does create a burden on the residents because the tax is levied on everything… food, the dentist, the hairdresser, rent. Everything.

I guess I should be clear that they should be collecting the transient taxes and paying them directly to the taxing authorities since they’re the ones collecting payment. Not talking about income taxes. I’ll definitely be paying on that on my own :slight_smile:

Right… That is what they would do here. Your income tax is on you.

Guess What? Someone from airbnb called me earlier this week. They were calling from DC - a ‘mobilization’ unit. He called to tell me that they are working with the state of Maryland to have a law passed to make all the taxes a line item on the guest’s airbnb invoice. He then referred me to this site:

https://www.airbnbaction.com/

@konacoconutz - one thing I’m confused about. I see that air is collecting occupancy taxes in most places, but I don’t see sales taxes being added anywhere. I am paying both sales and hotel tax. Do you pay both? The guy I spoke to from air said that is one of the issues that is so confusing and they are trying to get that all even.

Sales tax for room occupancy makes no sense. Were you told this by a government official? In Massachusetts even a service provider can pay sales tax on goods only hard goods, if they separate their labor and goods into two separate lines. There is no sales tax on services.

In California we don’t have sales tax on services, only on goods.

I collect both. But remember here in Hawaii it’s excise, a tax on goods and services, not a sales tax. I already have an excise license because I have to collect it on my writing services. That’s at one half of one percent though, as it generally qualifies for the wholesale rate unless you are selling the tangible finished product and with writing you almost never do. No other state has excise. It’s a holdover from the plantation days and is considered low, broad and regressive, a burden on residents.

So the total of what I collect is 13.42%.
Excise is 4.167
TAT is 9.25.

Two separate returns but it can all be paid with a single check, oh joy.

Since my county is very dependent on tourism dollars, it has an ‘occupancy tax’ paid by hotels, motels, bnb’s. This article was just posted in my local paper yesterday, I imagine by next year I will have to pay the 4% occupancy tax on my ABB.
http://poststar.com/news/local/warren-county-to-seek-occupancy-tax-from-those-who-rent/article_397440cb-1cfe-540e-a658-1cfe2c33be44.html

It’s really only right. These visitors are using your roads, parks and other services. If they were in a hotel they would pay it.

THEY Pay it, you don’t.

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I agree, it should be paid, and 4% is not so significant that it will cause a dramatic increase to my rates.

If my town decided [actually forbidden by state law at the moment] to charge the hotel tax to AirBNB homes, it would be 6%.

I didn’t question it since, when I stay in hotels, the tax is usually about 12-13% and that’s what my two taxes come to.

But I’ll look into it a bit further.

Thanks

It’s 14% in Los Angeles. I was paying it myself so that my guests didn’t feel nickel and dimed. I’m appreciative that Airbnb is paying it now.

Boston, on the other hand, charges a 14.45% tax. See why people choose my city, just 1.2 miles from the center of Boston?