I just got a “Good News!” email from Airbnb saying they would be automatically collecting occupancy tax in certain areas. I’m in Long Beach, California and also have a listing in Palm Desert, California. They considered it good news I suppose because they said I would have to do nothing and that I’d still get my usual portion of the booking fees they collect. It would be the guest who’d be noticing something different–mainly the added on 9% occupancy tax that the City of Palm Desert charges. I a bit concerned because, on top of the fees they have to pay Airbnb, they are going to get slapped with another 9% surcharge. Are they going to balk? Maybe want a reduced rate from me to compensate? Any thoughts?
I would be very happy if they started collecting the Transient Occupancy Tax in Los Angeles. I would lower my rate as I now have to pay 14%. It’s a hassle for me to track the income and send the tax payment. Also, guests think that I am earning appreciably more than I am. I don’t collect the tax from the guests as I believe that this will cause ill will. As the result of Airbnb hosting, I’ve learned that in most countries the listed price of a purchase is the final price. I’ve heard countless complaints about sales tax not being included in the listed price.
I think that it is to Airbnb’s benefit to collect and remit the hotel taxes in whatever localities charge these taxes. If Airbnb sends the tax payment as a lump sum, the locality can clearly see one of the benefits of allowing Airbnb operate in its borders. It the taxes are coming in piecemeal from each host, the locality will not know that the taxes are a result of permitting Airbnb hosting.
Good comments, Ellen. Since we are sort of “neighbors”, I’ll bet you’ll be getting the same email I just received stating that “certain areas” will have a new tax collecting system and to refer to the “location” section of your listings. Palm Desert popped up but I don’t think I see Long Beach.
Air started collecting our state and local taxes here in Florida earlier this year. Your guests will see this as just another line item in their bill. IMHO guests don’t even think about “fees they have to pay AirBnb”, and Americans don’t think of city/local taxes as “getting slapped with another 9% surcharge”.
having Air collect and pay the taxes you should have been collecting and paying all along is a GOOD thing. Trust me on this…
I appreciate your comments, Ken. For some, Americans included, the extra 9% does get noticed when a $34/night room turns out to be close to $50/night. I understand that it’s just the way it is; occupancy taxes are for the benefit of the city, but it’s still does have a bit of a bite to it :)))
My state, Pennsylvania, started collecting state occupancy taxes July 1…but nothing in terms of local taxes.
I see, kasage. Hmmmm. It’s going to be the norm as these various tax collecting entities come after the ever expanding “sharing economy”, and Airbnb is one of the biggest.
So, theoretically, our (mine anyway) little extra bed rented out to earn a few bucks to help buy food and gas is going to get regulated and taxed to the point of being as expensive as a lovely night at Motel 6! :))))))) The one up the road charges $85/night on weekends. Choke.
I’m a bit confused abut your complaint - have you not been collecting this tax so far? I thought the TOT in Palm Desert had been in place since 2012.
You are right about Palm Desert. I checked and did see the 2012 deal. We started years before that renting our place to pretty much the same group of Canadians who return every year for Jan, Feb and March. The rate has stayed the same and they just mail a check. No Airbnb and I never gave a thought to taxes, which are pretty high for us already. Then last year I thought I’d list it on Air and I got bookings for Coachella and Stagecoach. Rest of the year I continued with the Canadians as usual. As for the tax thing, Id rather stay off the radar for now. It’s so much simpler.A also, I live 75 miles away so I’m always a little nervous about not being there to greet the guests because the Coachella crowd can be on the wild side.
That’s disappointing to hear. I really hope you’ll consider getting permitted and collecting TOT in the future. The local municipalities of vacation towns really depend on this revenue.
Oh Lucy. Thanks for the comments, and the suble guilt trip
Yes, now with PA’s 6% state occupancy tax being charged, in addition to Airbnb’s service fee…it’s not becoming much lower than a hotel. I removed the cleaning fee as a result of the new occupancy tax. One good thing about the occupancy tax is at least now it made short-term rentals in my state.
You mentioned your state taxes, but what about your city’s occupancy tax also? This is what Airs new service is going to handle, at least in my area, Palm Desert in particular which has a 9% tax. When people are already paying $3200/mo, to have another $300 or so tacked on along with the $100 cleaning fee plus Airs fees it puts my place out of range for what it is.
I agree with you 1,000%. Transient Occupancy Taxes (or whatever they are called in the readers’ locality) are meant as a tax on people who use the locality’s infrastructure, but aren’t paying the taxes that residents pay (income tax, property tax, etc.). In areas with a lot of vacation rentals the result could be a shortfall for maintaining infrastructure which would drive tourists away. Also, these taxes are deductible.
As of now there is nothing regarding my town’s occupancy taxes. I’m not in a major city, but in a suburb. I do not at this time know of any local tax for my town.
But the 9% my guests would pay is not deductible
And as for infrastructure, I don’t live in Palm Desert, just have a condo there and visit it less than a 1/4 of the year but still pay all the taxes. So, the tenants are just taking my place; and even they’re only there for about 1/4 of the year, too. You like my logic? :)))
Occupancy taxes, when applied across the board, won’t make your place any more expensive than your competitors, just put it in line with them.
if people are staying for more than 27 days then they are not short term tenants, so TOT is not applicable http://www.cityofpalmdesert.org/departments/finance-/short-term-rentals
I’m sure we can all agree that the way many taxes are applied and collected in this country borders on farcical… But the future of AirBnB depends on maintaining good relationships between hosts and the local agencies that manage short term rentals. Widespread host non-compliance with permitting and TOT collection/remittance has lead to aggressive crackdowns on hosting in Northern California already, and I really don’t want to see more of that.
As other hosts have already said, you’re actually really lucky to be hosting in an area where AirBnB will collect that tax for you - not only will it save you time and energy, but this kind of action is likely to make the authorities in Palm Desert much more permissive of AIrBnB hosts in the future.
Wow Lucy. Yes! If they stay more than 27 days I’m exempt, and the majority of them do stay over that except for the handful of bookings I get for the Coachella fest in April, and that doesn’t amount to that much revenue for me anyway. I’ve presently got a nice couple staying for 4 months and can’t imagine them having to come up with another few hundred dollars–close to a thousand actually–for that occupancy tax. He got a job transfer to the Marriott Villas up the road. Perfect tenants. Very lucky.
I hope anyone who has not been collecting and remitting taxes…changes their profile and user name to one that cannot be traced back to them from this forum…EEK!
Technically you owe back taxes for any you did not collect and remit on behalf of guests. Fines, penalties, etc. may apply.