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Well you have only just mentioned that you are talking about a tourism/sales tax, which I think/hope the majority of hosts would agree all tourists should pay.
That wasn’t clear in your initial post.
I have been talking about different levels of taxation that an Airbnb business would pay.
Sorry @Josiah that your thread went off track.
Generally, here is the USA the taxes might include:
we seem to have entered into an interesting discussion between countries.
Josiah what are the “optional fees and permits” your local govt is considering imposing upon your rentals? And what do you currently pay and submit for each booking?
I see it both ways right now. But there’s already a dearth of accommodations in our city, further taxing and regulating an essentially non-existent sharing-economy seems extraneous. Basically, this other B&B owner doesn’t want the competition. I know it sounds conspiratorial, but the establishment wants to squash innovation and maintain status quo. I live in a small city - we all know each other, and the actions taken in the name of fairness are more punitive than anything else. They basically want to fee me out of existence. This city is notorious for not being business-friendly and the current administrative is extremely tribal.
but please answer my question and inform me …what are the “optional fees and permits” your local govt is considering imposing upon your rentals? And what do you currently collect and submit to govt for each booking in your home?
There are no structured fees at this time, but the other B&B did pay for a fire inspection and possibly a building permit, but I don’t think he pays taxes.
Exempt Establishments:
Under M.G.L. Chapter 64G, Section 2, the following room rentals are exempt from the room occupancy excise tax:
•a bed and breakfast home. A “bed and breakfast home” is a private owner-occupied house where three or fewer rooms are rented, a breakfast is included in the rent and all accommodations are reserved in advance. However, accommodations at a “bed and breakfast establishment” are taxable. A “bed and breakfast establishment” is defined as a private owner-occupied house where four or more rooms are rented, a breakfast is included in the rent, and all accommodations are reserved in advance.
Most Airbnbs would fall under the “bed and breakfast home” according the Massachusetts general law.
That’s interesting @Josiah - all businesses in the UK pay taxes (unless they make less than 10K a year), so surprising the B&B in your town isn’t, in the U.S.
Personally I think all accommodation being let out commercially, should have fire registration checks and permits and I would be happy to pay for this.
However, I do think taxation should be proportional.
so currently the difference is 3 rooms max vs 4 rooms plus and your competition wants this changed. I understand their position. They no longer want to allow a free ride and have unfair competition. If your govt is closed and united like you say, I think you should be prepared for a change in your legislation and get ready to handle Taxes.
There might be 2 or more types of taxes at play here. There’s a tax for net sale income (usually paid by the owner), and room tax for the price of the room (usually paid by the guest). There are also permitting fees and licenses, which sometimes get lumped into “taxes” imposed by local gov’t.
I’m a Social Democrat, I’ll pay my fair share if it comes down to it, but I’m afraid my municipality it coming down hard and CC doesn’t not understand how Airbnb works. They just now what they hear about in the news, or they think there’s some untapped tax revenue, in which case they will be seriously disappointed.
I already pay roughly $3600 a year for real estate tax. Taxing us on the net income from Airbnb might yield the city about $480. As I mentioned, there are only 2 hospitality accommodations in our city, 3 if you count me. One of those is a 200±room hotel resort. The other a 3-bedroom B&B. Taxing and permitting an already limited industry doesn’t make us look business-friendly.
It is possible that your rental income is still subject to “sales and use tax”, and the room occupancy excise tax is waived until the law changes. It is possible that you might not be meeting your tax obligations by collecting and submitting nothing.
I am sorry Josiah, but I will not be able to agree with you here. I wish you success and the best !
I hate taxes too but have to pay them. Anyone in Hawaii in any business, even selling coconuts by the side of the road, needs an excise license. So most of us have that already. The TAT is in addition. It’s a separate return but you collect both excise and TAT from the guest. Even though under current legislation home share hosts such as me [ I have an attached apartment] would be exempt from the regulations. I will still have to pay taxes even though I am exempt from regulation.
Visitors use our parks, airports, roads, 911 services and infrastructure. They should pay.
I agree with being willing to pay the taxes associated with STRs. Even if it is only one room in your home, STR is a business and we should abide by all local/state/federal taxation. To avoid it just adds fuel to the opposition fire.
Foe our STR we pay:
local license fee
Personal Property Tax on all items in the house available to guests
Income Tax
Sales tax
Accommodation /Tourist tax
The sales and accommodation tax are paid by the guests through the reservation process, we just need to declare it on our personal tax forms as having been paid. I understand frustration considering you also pay property and maybe a separate school tax (as do we) but that is a separate issue given all property owners in the US have that as well.
Given the huge growth in Airbnb properties in our area over the past year I expect eventually the city and county will take a hard look at the listings and I want to be completely above board and will not mind in the least if they shut down/fine those who are not in compliance.
It’s not just the taxes that is an issue, and it really isn’t for me. But it’s the regulation of being told I need to install certain fire safety measures that may be well above and beyond what a private residence needs to do. The petition that was presented at our city council could trigger other fees and certificates and licenses that would make it virtually impossible for anybody to actually have an Airbnb in my city. Since there are only 6 Airbnb listings, one of them is the bed-and-breakfast owner who put this petition forward, could backfire and create a whole new set of criteria that he too would need to follow. One of them is the BNB owner who put this petition forward, could backfire and create a whole new set of criteria that he too would need to follow. I’ve spoken to the Building Commissioner and the inspector at the fire station who inspects accommodations, and neither of them think that a private resident renting on Airbnb really poses a risk to anyone if they at least keep basic smoke detectors and in their home. But our current city council really loves their power and tribalism which makes it very difficult to do things in this city that’re outside the box and outside the norm
In our state ( Michigan) there is a state statute that defines B & B. In that definition a bb serves breakfast at no cost to guests. So our airbnb home share we do not serve breakfast so we are not a B & B. So there is more regulation because of food issues. Curt