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NM tax rate is still wrong after dealing with Airbnb for four months.
On 11/1 I did a test booking for 4 nights @ $138, total $552, plus cleaning $50, Airbnb’s service fee of $78, a total of $680. Tax at 7.125% should be $48.45 but Airbnb is charging guest $56 or 8.2353%
What is wrong with Airbnb that they cannot get this right?
Maybe they are grifting. Reporting this to the state tax office might help?
That really wasn’t a route I wanted to take but I may have to. All I’ve gotten lately from ABB is, “I’ll pass this on to someone on my team that can better assist you.” I don’t think any such person exists. And they’re going public this year?
You could at least hand it over to your Attorney General. Most states have some place online that you can report something like that.
Problem is, NM is at the root of the problem with having so many different tax rates and districts. It’s just too complicated for bears of very little brains.
Is it possible that Airbnb has you in the wrong district for some reason? An old mailing address or something?
my favorite thing to say every time Air (or anyone, including me) messes up.
Air can’t “math.” There is a perfectly good state, local, county tax software application that Air could integrate that works flawlessly with on-line e-commerce. We’ve integrated it for a high-end client and they were very happy. And not grifting.
I sent them the official state map, showing my exact location and the flag that says what tax district I am located in. ABB actually agreed and said it would take a week or two. That was Sep 10. I’ve been at this address for twelve years and never did rentals at my previous address. They are either too lazy or too stupid to be able to fix this. VRBO managed in three weeks to get it after I sent them the tax map and three quarters of state filings. Guess that’s why VRBO makes 20% on a booking; they pay people to think!
Just a FIVE MONTH follow-up. Two weeks later and Airbnb just overcharged another booking. They also sent me another “I’ve forwarded your inquiry to a member of my team who can better assist you” which is a lie because after five months there is no one at Airbnb that has been able to assist me.
I’ve notified a tax auditor at the state. We’ll see if they can do something.
So sorry to hear all of this. I just went through this nightmare with VRBO. Luckily for me, I live in a small town and have always been in contact with county tax collector by first name. She is completely aware of the situation.
It took me weeks to get a statement from VRBO admitting that they will take responsibility for any indifference.
They just started collected taxes for NC. They had me in the wrong county. Now…they would not admit if they would forward the taxes to the correct county. I worked with my local county tax collector and copied her on all correspondence.
In NC the law is that the “facilitator” is responsible for all taxes if you contact them within so many days of guest checkout and they have not remitted the taxes to you. So I plan to contact VRBO every single time for a booking and when guest stay ends.
In NC my 13% lodging tax rate is also applied to the service fee. Have you checked into your jurisdiction about that? Are they applying taxes to their service fee?
I know they’re collecting tax on their service fee which seems really wrong to me. They should charge that fee and book it separately from the tax on what is paid to us. By paying that portion of the tax on our tax account it makes it seem as if we are receiving the service fee.
As to VRBO, after three weeks of no action, it took them another three weeks but they fixed our tax rate.
If they are charging tax on the service fee, then it is likely your state law. NC if one of the few states that has that law. In most areas, the service fee is not taxed. Think of it this way…some states have a law that when the consumer pays for the accommodation it is based on “total consideration” that they had to pay. You would need to research your state law though. NC law is clear. They tax everything.
ABB likely is just turning in one lump sum check to the state for everyone, and nothing applied to your individual account. Most of the agreements to collect tax between ABB and jurisdictions are purely voluntary. Only in a few areas is it required for an OTA to collect the taxes.
Keep accurate records. And def. research the laws to see if New Mexico has something similar to NC law where facilitator becomes the one liable for taxes. After all, they are the ones making an agreement and no longer remitting to you.
Yup. And when I refunded a guest who left early after someone else booked hey charged him the full? (Maybe not quite because it was about $238 extra) taxes for the 3 month booking. When I asked about it they said they would be submitting it. But how can they submit for nights that were canceled? They won’t, they will just keep it for themselves. I asked to speak to someone that handles the taxes and they said they would have them contact me…I’m not holding my breath as it has been about 3-4 weeks already.
This also depends on state laws. Some states treat the cancellation (if money was received and kept (not returned)) = receiving consideration; thus, they are entitled to the taxes.
Other states will treat it like no transaction really took place and no need to remit taxes. And the guest is entitled to the refund of taxes.
In my case (also NC) the money WAS returned BY ME. Airbnb likely didn’t refund Airbnb service fees though…
That had nothing to do with tax law in NC though. That is the site’s policies. In essence, the consumer is making a transaction and agreeing to not being refunded that transaction fee unless it is an error made by ABB. I know that most travelers don’t realize it at the time unless they use the site a lot and have dealt with cancellations.
The fact that you did not receive the “service fee” makes you not liable. ABB is liable for that as they have now taken on role of the facilitator. Now…if everything really went to court and none of us contacts ABB, etc. …then I guess we could technically be held liable. However…I am going to say that a judge would look at “intent of the law” - ABB will be liable.
I think we are missing each other’s points because i don’t think what you said here in this response has anything to do with what I was talking about.
If a guest books for 3 months and pays not only the service fees to Airbnb but the taxes on 92 days of lodging in that state and county but then only stays 26 days of lodging in that county and is refunded the lodging for 66 days (even if not refunded the service fee for that amount) would not the taxes need to be refunded to the guest as well? If not then it becomes gravy to a Airbnb who charged it in the name of taxes. Sounds like Airbnb makes even more bank on guests that cancel than I thought! Regardless of whether or not the host refunds anything…
Makes me wonder…no wonder Airbnb wants to be the middle man!!! And of course wants the host to be the decoy to through the guests off of them…
Sorry @Militaryhorsegal if I missed your point! OK…maybe I will get it this time. From my understanding of NC. Maybe others from NC can chime in to share their understanding also.
But…if you keep any monies then the associated lodging tax is to be remitted to the state. If you refund the monies then it gets refunded also to the guest.
Example: service fee is retained - associated lodging taxes would be remitted
Refund is given to guest. Associated lodging taxes would be returned to guest.
I am not a tax person, etc. in NC but that is my current understanding of the law.
So am I understanding that BOTH accommodation fees need to be refunded from host AND service fee has to be refunded from Airbnb in order for the taxes to not be due?
This is only a guess… I would think that if the service fee is retained by ABB (not refundable at all) - then any associated lodging taxes are not returned and are to be remitted to the state.
ABB cannot just sit on taxes and hold them as gravy. All of it needs to match up.
Example. A guest books for 10 days. ABB collects the taxes. Then the reservation gets edited to 5 days. The 5 days that were refunded…so should the taxes be refunded and adjusted on ABB’s end.