Nearly a year of wrong taxes!

Regulations/Tax Issues
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Jun 2, 2020, 10:48 AM Home | Airbnb Help Center airbnb.com

Seems as if Airbnb deleted my previous post on their Facebook page about their overcharging NM guests on sales tax (GRT). I am reposting my original and their response. I cannot figure out why they refuse to fix this.

Beware if you are a host in New Mexico. Our state has multiple GRT (sales tax) rates that vary according to your location. I have been battling Aibnb since they started collecting the tax for New Mexico LAST JULY. That’s 2019, folks, now 11 months because they are collecting the wrong tax rate for my location!!! They’ve admitted the rate needs to be fixed but it could take several weeks. That was in September 2019. VRBO had the same problem but they managed to fix it in a matter of weeks. New Mexico has a searchable map where you can verify what your tax rate should be. Hosts should verify their guests are not being overcharged.

Charles G, Jun 2, 2020, 8:37:37 AM PDT:

Hello Donald,

Charles here with Airbnb and I can see you have had ongoing issue with local tax collection in your area.

As you can see by the provided information that the percentages can vary and it also includes Guest Service Fees. The tax is calculated based on the “listing price including any cleaning fee and guest fee”. This amount that the guest pays in service fees is not accessible by hosts due to privacy concerns. This means that if you do attempt to calculate the amount it will seem incorrect.

Guest service fees

The guest service fee for homes ranges between 0% and 20% of the booking subtotal (the nightly rate plus cleaning fee and additional guest fee, if applicable, but excluding Airbnb fees and taxes) and is calculated using a variety of factors—these include the reservation subtotal, the length of the stay, and characteristics of the listing. In general, the service fee gets lower as the reservation cost gets higher. Guests see this fee on the checkout page before they book a reservation.

New Mexico State, NM

Guests who book Airbnb listings that are located in New Mexico State, NM will pay the following taxes as part of their reservation:

Gross Receipts Tax: 5.125% - 8.6875% of the listing price including any cleaning fees and guest fees

Airbnb has no bearing on the percentages charged when there is a range as this is controlled by your local tax authority. I have determined the amount of tax collected does fall within the states range of 5.125% - 8.6875% and therefore a correction by Airbnb would not be possible.

I hope this answers your question and any further information about the Voluntary Collection Agreement in your area should be redirected to your local tax authority.

Airbnb appreciates your business and values you as a host!

Best Regards,

Charles www.airbnb.com/help

Oh Charles you are wrong on so many points.

I can do an anonymous booking and see what the guest fee is and therefore know you are overcharging guests. I can calculate to the penny what you are charging and what you SHOULD charge.

There is a range of tax rates in NM because they are based on SPECIFIC locations which is why NM Taxation and Revenue publishes an interactive map so ANYONE can determine what their tax rate should be. You can either drill down on the map, or search for a specific address. It’s not that hard Airbnb, even you can do it. http://tax.newmexico.gov/gross-receipts-tax-historic-rates.aspx

The range isn’t given so that people, or Airbnb, can choose a rate they like.

As I have said in the past ad nauseam VRBO got it right; why does Airbnb REFUSE to collect the correct tax and instead INSISTS on OVERCHARGING guests?

I seem to have gotten some attention but I can’t figure out what did it. Tweets to Mr Chesky or posting on Fakebook? I’m guessing the latter so I will have to post this response there along with my response. I am not going to accept Airbnb overcharging guests because if they’re overcharging my guests, it’s quite likely they’re overcharging a lot of guests that stay in New Mexico.

Airbnb’s newest response:
Charles G, Jun 2, 2020, 11:16:50 AM PDT:
Hi Donald,
Thank you for taking the time to share your perspective.
After gathering and carefully reviewing all related documentation, we decided the amount of local taxes is within our Voluntary Collection Agreement range of Gross Receipts Tax: 5.125% - 8.6875%.
If you have additional questions about this process we encourage you to contact your local tax collection/revenue office. Airbnb has no bearing on the percentages charged as this is controlled by your local tax authority. They will be able to let you know how the Voluntary Collection Agreement with Airbnb works in greater detail. There would be no further assiatcne Airbnb can provide at this time.
Best,
Charles
And my reponse:
Well Charles G., I would like to see this “agreement” that allows you to choose what you will pay! I’ve never heard of anything so absurd. Why didn’t you pick a lower rate to save guests some money?
“Airbnb has no bearing on the percentages charged as this is controlled by your local tax authority”? But you’re telling me you picked a number from a range. THAT is bearing! And the state determined the rate for my location is 7.125%!

I am not going to stop until I have proof that you are allowed to pick an arbitrary rate. I will keep posting your responses on social media. And I will repeat, Why can VRBO get this right and Airbnb REFUSES to even after admitting in September 2019 that the rate needed to be changed?

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This is nuts. What, is Airbnb collecting an average or over-collecting, then remitting the correct amount by jurisdiction? And re-allocating any surplus as Airbnb fees? Ugh.
I can only suggest you get samples of your guests’ invoices (or via your pseudo booking method) with any overage and send them to your local taxing authority. This is possibly a violation of something; most governments require accurate disclosure of tax amounts to lodging guests.
I hadn’t thought about the wrinkle that Airbnb collects tax on its service fees to guests. As I have no easy way of seeing that figure, it means I have no accurate way to remit lodging tax to my local jurisdiction, which is my responsibility.

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Here’s a negative review of Airbnb tax agreements:

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You can test what ABB is charging by anonymously booking at your place. That will show you all guest charges including the fee a guest will pay and the tax. Tax, divided by total of charges, will give you the rate. Three nights at Casita Cresta (my place) @ 138 per, 50 cleaning fee, fee to ABB 77 (guest) total charges 541, taxes 44. Divide 44 by 541 and you get .0813 or 8.13% rather than 7.125% or 38.55. Bingo over charged guest!

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For better or worse, New Mexico Taxation and Revenue Department has forwarded my concern over Airbnb overcharging sales tax to their fraud department.
I will be astonished if NM has allowed the platforms to “select” their tax rate from a range. If they have, that will be one for the media.

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You are barking at the wrong squirrel.

You need to contact your state taxing authority and ask for a copy of the (probably written by AirBnB’s lawyers) “Voluntary Collection Agreement”, since the state apparently consented to it.

Perhaps it’s the state that has set the rate they charge, and not AirBnB? If not, then you can inform them and ask what they’re going to do about it!