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I’m a new host and having trouble learning the best way to handle our local city and county taxes. What is standard among hosting, to add that in the taxes for the guest at listing or increase the price to cover it? I’m unable to tell what my competition in the area is doing.
Also, I cannot for the life of me follow what support is telling me to do to label different lodging taxes into county and city (I don’t have those dropdown options.) Can someone please help me get some help here? I’m a bit frustrated. TIA!
I don’t personally have to collect taxes from guests because Airbnb collects and submits them to my city but I can help with a couple of your issues.
I can say that you definitely do not want to include the occupancy taxes in your nightly price.
[ Airbnb is going to charge you a 3-15% service fee on anything that is included in your nightly rate. So you don’t want to pay Airbnb a fee for taxes that you are merely just collecting from the guests to pass on to your city and county. Those taxes are not your money, you are just collecting them, so don’t pay a fee on them.
Additionally, occupancy taxes are usually a percentage of the nightly charge, e.g. they are based on what the guest pays you to stay. So if you collect taxes within your nightly rate you will still have to give your county and city a percentage of what you collected, which means you are giving them taxes based on an amount that already includes taxes.]
So just keep them separate.
You need to turn on “Professional Hosting Tools” to have those drop-down menus for occupancy taxes. You go to your Account (not your listing information page) to do that. Here’s the info and if you’re logged into the website when you go to this article then you should be able to click on the hotlink for “Account Settings” at the top of the article and it will take you directly there:
This is all very helpful, thank you. I have professional hosting tools turned on and was able to add taxes, but not the choices of city or local. My only logical choice is lodging but doesn’t separate it out. Others in the dropdown are: Hotel tax, Lodging tax, room tax, tourist tax, Transient occupancy tax, sales tax, VAT/GST, Tourism assessment/Fee under the custom tab.
What am I missing? I know this is not an AirBnB support group, but I have had no luck so far with support.
Tlutte, could you use one of the pro tools to pick a tax category, then give your guests a separately created receipt with the taxes broken out into the correct buckets?
Before Airbnb collected taxes in my locale, I rolled them into my rate so guests would not have the complication of paying me a separately collected tax. I made the custom receipts for my guests, sent as an attachment. This was particularly helpful to one guest who had to cancel and needed travel insurance documentation.
I calculated the base for my filing and payment of state sales and local lodging tax by dividing the all-inclusive rate by 1 plus the tax percentage.
Yep, it messed up the math, inflating Airbnb fees. And, when Airbnb added on the state sales tax but not the local lodging tax, it inflated the sales tax collected as the base rate was still inclusive of the local tax.
But my base rate is only around $100 so the distortion was pretty small. I think I could have jumped through some hoops to opt out of Airbnb collecting and remitting the tax and leaving it up to me, but oh well.
Now Airbnb collects both sets of taxes in my locale, so that particular host headache is gone. I still maintain my business tax accounts with both the state and the county in order to remit taxes on my direct bookings, using the same all-inclusive rate scheme.