Airbnb has begun collecting taxes for the state of Kentucky. However, there are several issues with their approach:
- The calculation they use is incorrect. In KY, you are supposed to pay Transient Room Tax (TRT) for all rooms in an establishment that have “Transients” regardless of the length of their stay. Sales tax, on the other hand is only due if the guest stays for less than 30 days. Airbnb does not charge either type of tax for stays of more than 30 days.
- The report they provide double counts some stays, and over-states the amount of tax they pay. There is no easy way to calculate the amount of tax airbnb paid on my account for the month because of this error.
- When municipalities (city and or county) have a TRT, the KY law says that the amount of sales tax assessed must include the amount the guest paid in TRT. This seems to be double taxation, but this is the law. In my area, Airbnb does not collect TRT for the municipalities (just the state of KY), Thus, they are under-reporting the amount of sales tax due because they do not include the TRT for the municipalities. I can provide an example if anyone wants details,
I contacted airbnb about this issue. They have not addressed it (or even tried to understand the issue), To cover my a$$, I have been calculating the tax I think I really owe and sending it to the state of KY. This is a complex and error prone process.
I also sent the state of KY a registered letter telling them what I am doing. No response there either.
If anyone is interested I have much more information,