The proposed tax, outlined in an amended [Senate Bill 5334,] would tax the nightly rate on short-term rental lodging made through online platforms like [Airbnb]. this is on your gross income.
There is still time to have your say on this by emailing and calling your state rep.
I donât live in Washington State (but I can see Mt. Baker and the Cascades from my roof), That said, I donât think this harms Airbnb hosts because all your local competition is similarly affected. I donât think someone with their agenda being âvisit Seattleâ (or San Juan Island or Olympic [mountains] National Park) is going to switch to Oregon or Canada or Idaho because of a 10% tax on accommodations.
As an industry, a tax like this helps protect us from charges that we unfairly compete with hotels and we mooch off other businesses that contribute towards taxpayer-funded infrastructure and tourism marketing â arguments that are sometimes used to recommend STR be shut down entirely.
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I agree with @spark, who said more or less what I was going to say when I read the initial post.
Guests donât stay away from an area because thereâs a 10% tax on lodgings there. There are many, many taxes that weâre all subject to and in this country anyway, they vary from state to state.
If Iâm going to a friendâs wedding, for example, Iâm not going to stay somewhere else, after all.
I donât know why we have to âhave our sayâ at all.
Thank you Jaquo for your feedback, I agree it will not effect the guest because this tax is on the host gross income from what they make from their Airbnb.
Thank you Spark for your feedback, I agree it will not affect the guest because this tax is on the host gross income from what they make from their Airbnb.
Thatâs not what the responders said at all.
Since all hosts in your area will be affected by this, if everyone raises their prices to cover the added tax, itâs not a big deal. If you currently charge $100/night, you up that to $111/night and end up with the same amount after taxes.
Er⌠it will affect the guest because the hosts will have to put their prices up. Surely youâre not suggesting that hosts would just eat the extra expense?
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Thanks for the feedback this helps me see where people are on tax increases of their income.
Yes it will increase the cost of booking a Airbnb
All kinds of things increase the cost of booking an Airbnb, from taxes, to the cost of increased cleaning wages and other services, to the cost of utilities and supplies. Itâs no different for any type of business and prices go up accordingly. Sure, no one likes to pay more taxes, but thatâs reality.
Of course, there is nothing wrong with Airbnb hosts weighing in with their governments if they feel that proposed regs or taxes are unfair. The powers that be often are unaware of the realities of the str business and assume all hosts are majorly raking in the bucks, or are unaware that some hosts just rent out a room in their home which causes no problems in the neighborhood. Sometimes they need to be educated.
But many areas have banned Airbnbs entirely, or at least certain categories of them, like whole house rentals with off-site hosts. So you should be grateful that hasnât happened for you, and you are just dealing with increased taxes.
I think it is illogical to decide on where you want to stay based on the breakdown of where your payment goes; do people really decide to stay at a place because they approve or disapprove of the amount of taxes?
The OPâs concern doesnât seem to have anything to do with losing bookings, he just objects to paying taxes. There are a lot of people who object to paying taxes, but what I donât understand how they think infrastructure gets funded without taxes. They benefit daily from all the things that taxes pay for, yet somehow think these things just get magically built and maintained.
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Do they not collect the tax by adding it on to what the guest pays to Airbnb and then having Airbnb remit to government. Thatâs how the âoccupancy taxâ works in my jurisdiction (introduced about 3 or 4 years ago).
Under that model, hosts never touch the tax. The government taxes the accommodation through Airbnb â just like a retail merchant collecting sales tax at point-of-sale.
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Like the airports and roads their guests use to get to the Airbnb and the police that keep the community from being as risky for guests as a visit to Haiti or Guatemala.
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The OP seems to be saying this is state income tax on the hostâs gross income. Occupancy tax and VAT (or GST in Canada) gets charged to guests, but income tax doesnât.
In our jurisdiction (the Canadian province of British Columbia) the tax is based on the hostâs gross income (the âaccommodation feeâ), but â by arrangement between Airbnb and the British Columbia government â it is collected (and remitted) by Airbnb. The government does not want to be chasing 18,500 different Airbnb operators for remittance for its $20 million every year. For government â itâs one tax source, one audit, not 18,500
Washing state â adjacent to British Columbia â would be fully aware of the British Columbia model, and I cannot imagine that they would opt for the less efficient âletâs chase tens of thousands of individual hosts for this bed taxâ instead of just opting for a simplified, reliable model where Airbnb builds the tax collection into the booking process.
That said, hosts in every jurisdiction where there is an income tax are required to declare their net Airbnb income (after subtracting every damn business expense they believe the law allows) as part of their taxable income when filing their annual income-tax remittance.
So â Airbnb hosts in Washington State are not allowed to deduct related business expenses
the way other tourism businesses and other landlords are? I cannot imagine an American government being that politically suicidal.
Airbnb has different tax arrangements with different jurisdictions. Here in Mexico, Airbnb withholds all the state occupancy tax and half the Goods and Services tax (called IVA here), which is all charged to the guest and remitted to the Mexican tax department. They release half the IVA to the host to pay to the tax dept. themselves (so the accountants can reduce anything owing by balancing it out with the IVA paid by the host in expense deductions- tax declarations and payments have to be made monthly, not just once a year ).
Airbnb also withholds and pays the income tax owing, which is deducted from the host payout. The Mexican tax department made Airbnb collect and remit the federal income tax because there were so many foreign hosts with properties in Mexico who arenât even allowed to earn $ in Mexico, as they arenât citizens or residents, therefore arenât registered with the tax dept. and donât have tax numbers. Mexico punishes those hosts by taking 20% income tax on their listings, as opposed to the 4% those of us who are hosting legally pay, and they canât claim any deductions. I guess the govt. decided it was smarter to levy heavy taxes on them rather than shut the listings down.
But it seems incorrect that in Washington state, hosts canât deduct business expenses from gross income. Just because they say they are going to charge 10% on gross income doesnât mean a host couldnât lower that amount by deducting expenses.
It does seem incorrect â it makes so little sense that I suspect it is a misunderstanding.
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Thanks for your feedback. If you read the Bill. [Senate Bill 5334] In a move aimed at addressing the pressing issue of affordable housing, state lawmakers are considering giving cities and counties the option of implementing a 10% excise tax on short-term rentals.âWith the proliferation of short-term rentals in our communities, it became very evident that people are pushed out of houses that had traditionally been in the long-term rental market,â
Iâd really like to see facts and figures regarding the âpeople are pushed out of houses that had traditionally been in the long-term rental marketâ thing.
Iâm sure that itâs the case sometimes in some areas but as a blanket phrase, to the extent that âit has become evidentâ, Iâve yet to see facts and figures showing that it is evident or even prevalent in all areas.
Society changes all the time. What was once traditional is often no longer valid. Iâd also like the governments and states that are saying this to weigh their assertions up against the added tourism brought into the area, work created, more money going to local businesses and other benefits that are created by STRs.
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