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Yep, it is NC. As far as short term rentals in most states - there are very few places that don’t have to collect the tax. But for the most part most states at least tax the nightly rate/cleaning fee.
Some don’t collect tax on the cleaning fee claiming that it is “labor” and their state law allows them not to tax labor. Those people should check their laws again. I’m not saying that may not be true in some states…but I have read people claim their accountant has assured them of this, and often times this is just not true. They will owe years of back taxes if ever audited.
My partner initially thought the cleaning fee wasn’t taxed because in his other business he could tax parts but not the labor. But it’s different with a rental, as having the place clean upon arrival is not an optional fee. You would never rent out your house dirty.
In some states optional fees such as pool heat may not be taxed. But as far as taxing the booking fee, NC is the only one I know of that is very clear that the booking fee is taxed. IF you scroll through the list of areas that Air collects tax, you will see the wording for NC is a bit different to tax the booking fee.
I have always wondered how VAT works. What does VAT stand for?
So when you say they take the 20% tax off - does that mean all prices in UK have tax built in to the total? Is VAT a regular sales tax or a lodging tax?
I don’t know about now but when I was in the UK, VAT was like American sales tax. But for most things, it’s included in the displayed price. So it was a surprise when I came to the States and had to pay sales tax on top of the displayed price.
Yes, I found that confusing too when I was there. In both India and the UK, taxes are quoted as part of the price. But in the US they don’t do that. The way it was explained to me, is that they don’t quote the taxes because they aren’t charging it.
In the days before computers it was a nightmare for businesses to deal with. We had to record the VAT we charged, then deduct the VAT we paid and send the difference to the taxman.
Yeah it’s the opposite to the states where you add the sales tax on (and does the $ differ between each state as well??). VAT (value added tax) as its called or GST (goods & service tax) in NZ or Australia is always included and its set at certain percent - VAT = 20%. Some things aren’t taxed - fresh fruit and veggies while others have a extra tax, like the sugar tax which the govt is bring in to curb obesity. So, normally at the end of supermarket receipt you’ll see the amount on one line, VAT on the next, and the total to pay on the next. I’m rubbish at maths so every time I go the states I find it annoying the price you see isn’t the price you pay.
Any way, back to Air if you’re wondering this is what I see as a guest on air (we’re going up to Edinburgh in august - yay!)
so, yeah AIR has taken the VAT for us. However, if we make over £2500 a year through it is classed as a secondary income and you need to pay income tax on it but only if you make over £10k. People who make £10k and under aren’t taxed at all.
So, here’s a followup on my earlier post. Things show signs of going a little pear-shaped.
Here is what I last wrote:
So this special offer expired after 24 hours. I checked with them, and they said they had been very busy but would book by Sunday. So we arranged that I would send them another special offer (a repeat of the earlier one) late Saturday, early Sunday. I wound up sending them another special offer Saturday afternoon.
Note that all this was done using the Airbnb account of the female member of the couple.
Then Saturday evening, I unexpectedly heard from the male member of the couple. He made a booking request for 3 nights at my single person rate, and listed one person. I wrote back, pointing out (a) that (presumably) two people would be staying, so that wasn’t accurate and (b) that they had said they would be staying till the 9th (11 days).
He wrote back and said that his girlfriend’s Airbnb app was having some problems, and they weren’t able to confirm through that. This doesn’t make much sense. Unless the Airbnb app (I’m guessing this is an Android thing) follows its own special laws, it should be easily possible to use a different phone or a computer and log in through that. Unless there is a problem with the account itself, which seems unlikely.
Then I said I’d make him a special offer for 3 days at the single person rate for 2 people. He said Ok, decline my booking request. I said, no, cancel at your end. So he did, and then I sent the special offer, but heard nothing. I wrote again this afternoon, and said that after his cancellation request yesterday, Airbnb hadn’t refunded the money back into his account!! (He included some kind of automated email.) Then added that he was following up with them, and would complete the request post-resolution. By the request I assume he meant accepting the special offer. And then added that they would be here at 10 pm!
Anyway, this got me a little concerned. I could see them turning up at my doorstep not having booked, so I wrote back that they needed to book before checking in. Yes, I actually wrote that.
Then I got back a request for a 1 night stay. He said he’s renew it tomorrow. So, I sent him an offer at the discounted price. I hope I don’t regret it.
I’m thinking that maybe I should have not offered a discount in the first place. But the room is currently empty for the next 10 days, and it’s not like I’ve been getting much by way of bookings. So it seemed reasonable at the time.
Thoughts? See, I’m already becoming a hardened veteran with war stories. (A reference to an earlier post in a different thread…)
So, does Airbnb actually withdraw the money from your account when you make a booking request, even if the host hasn’t accepted it? If so, that seems quite strange. The service in question appears to be PayUmoney. I’m not familiar with it.
UPDATE: My one night special offer was accepted. Also, is it possible to extend special offers? Does anyone have experience with that?
I’m exhausted just reading about the back and forth you had with these guests! I have little tolerance as well as an ability to make ends meet without my ABB income, so I would have given up on these guests! It’s supposed to be a rather simple business transaction, these people would have driven me crazy!
Yes, sales taxes vary by state like Faheem said. I don’t even know if they vary by county because I only keep up with the lodging tax I collect. But lodging tax varies by county in each state. I collect 11.75% from guests, and someone a few miles down the road in a different county may have to collect 12.75%.
I have heard both and am not really sure how Air processes payments. Some say they do a pre-authorization to make sure the money is there - but if the host does not accept then it still may take some itme for the pre-authorization hold to be released.
Others have said they don’t do anything until the host accepts. So I have no idea with that. But it does make sense if they are not releasing the hold, that the guy maybe only has enough money left to book for the one day for now.
So they no longer are interested in staying for 11 days, and now only want to stay for 3?
I suppose it’s possible that different methods are used depending on the specific mechanisms/financial entities involved. But it would be nice to have a better idea. I don’t think it’s reasonable to take any money till the host accepts. This might be worth creating a separate thread about - it’s a fairly important point.
I’m honestly not sure what they are planning to do. If and when they turn up I’ll ask them. Now coming up to 11.30 pm here. Sheesh.
Yes that’s right. As a guest - I get charged the service fee and 20% tax and as a host they charge the 20% of the service fee. so, basically its service fee + 20% of that = total. Hope that makes sense? it’s a long weekend here - I’ve already had two wines - had a few tough guests of late… ha…
In Air’s 1099, any reimbursements for damages are rolled into the total. So you would have to itemize them or pay tax on the reimbursement as though it were income!
Some news pundit here was airing all the Republican reactions to the nomination of Donald Trump (i.e., his OWN party) and one of them stated: “I’m in such shock I’ve been drinking wine directly from the bottle.” Had to laugh at that one. , so if guests don’t improve soon, KJ, you should just do the same.
, so if guests don’t improve soon, KJ, you should just do the same.