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Occupancy tax on host fee? A bit confused


#1

I’ve been hosting for a few months now and stalking this site as lots of great input and experiences can be found here. I’m working on my master spreadsheet for tracking and it’s about time to submit the quarterly tax submission for the sale tax here in WA state.

SO, buried in the ABB site I found how much ABB is remitting in taxes as I have to reference this payout on the quarterly tax form. It appears that ABB is submitting Occupancy Tax based on the nightly fee + service fees (that they charge the host). Please note that they call it Service Fee in the reservation and Host Fee in the tax summary.

It took me a while to figure out their math but it doesn’t make sense to me for ABB to pay Occupancy Tax on the Host fee. Usually I wouldn’t go through all of this trouble trying to figure out what they’re doing but now I’m wondering if I am reporting this tax correctly on my VRBO income.

Perhaps I’ve been looking at this too long…am I misinterpreting this? Here is a snapshot of a single reservation. Any input would be appreciated!

Reservation Payout

$116.42 x 19 nights $2212.00
Cleaning Fees $54.00
Service Fee -$67.98
Total $2198.02

ABB Remittance of Occupancy Tax
Currency USD
Amount 2198.02
Host Fee 67.98
Cleaning Fee 54
Gross Earnings 2266 <-- this is 2198.02+67.98
Occupancy Taxes 199.41

(Amount + host fee) x 8.8% = Occupancy taxes


#2

I did not go through your math. Obviously you know the guest pays a “service fee” and the host pays “credit card fees” - whether they are calling the latter a service fee…not sure.

In the state of NC, lodging tax is charged on guest service fees, not on a host’s credit card fees. Many states do not do this; however, NC is an exception to the rule. So if a guest pays $200 in ABB fees…they are also taxed 12.75% tax on top of that amount…ouch!


#3

I haven’t researched this, but I’ve just always paid lodging and sales tax on the gross (including the cleaning fee) because that is my advertised occupancy cost to the customer. Then I count the Air host fee as an expense deduction. The same as if I got the entire amount up front, and the Airbnb sent me a bill later for their “sales commission” or “marketing services,” or what-you-call-it.


#4

I have come to the conclusion to do the same. Whereas I don’t understand their logic, it’s not worth my time to try to figure it out further.

Thank you!


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