Tax Collection for city lodging

I live in CO and Airbnb collects state tax automatically in this state. How hard is it for a town to get set up to collect lodging taxes. I am trying to push my local city to get set up.

And right now, the only way for me to collect local taxes is to send out a special offer on all bookings? I find that really inconvenient especially if you have instant booking set up. I have been just paying the taxes out of the price i charge.

Thanks for any input.

I don’t recommend that. The reason is because you pay 3% on the tax you collect as they roll it into the total. Also, you will report your total income to the state and Feds as though the tax were income.

I know you can fix it in your bookkeeping later but I’d rather not.

I collect in cash so the pyramiding doesn’t happen to begin with. It’s allowed on the platform. You have to have it disclosed all over your listing that tax is due upon arrival and in cash. I greet them in person and get their tax right away. Most all have it ready.

wow, i did not even think of that. So essentially i am paying tax on tax.
I use auto check in, and am rarely there to meet them in person.
So how do most other people do this when airbnb does not have an agreement with the municipality?

I do all-incusive pricing as Airbnb collects nothing for taxes in my locale. I have flexible self entry and don’t want to futz with post-booking tax collection. I take the total price and divide by 1.1325 to get my base price to report for state sales tax and local lodging tax. Yes it’s true that Airbnb is therefore “charging” slightly more than 3% as a booking fee off of the backed-out base price , which is an expense accounting item for me, but I can compensate by upping the inclusive price a bit so I don’t care. I fully disclose the tax rates in my listing and even have a hotel-type statement (if I like the guest I leave a hard copy with my direct book brochure; if not I just message it) that breaks out the tax payments so I comply with state invoice format requirements, Plus of course my state tax collection certificate displayed on the wall in the unit, along with my local transient stay permit. (Dang, and you wonder where those annoying “hotel” expectations come from!)

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I’m under the threshhold to get a 1099 from Air, but if I wasn’t, I’d make the corection on my tax return and I have the state/local tax filings and customer invoice records to document in the event of an audit. I highly doubt that asking Airbnb to issue a corrected 1099 would go anywhere!

yeah i guess i need to deal with this. My place generates over 100k/year in gross rev. i have another that does $45k.
i wish the city would just establish this service with Airbnb. Anyone know how hard it is for a municipality to get this done.

Local tax collection would be great, but I’d still be messed up on the state sales tax. My guess is that Airbnb collects in locales where it’s had to cut a deal with municipal authorities to continue operating. It would sure be nice if Air added a “Taxes” extra charge field that it didn’t include on the 1099 as income for the rest of us. If you want to correct an Air 1099, it wouldn’t hurt to have a copy of a request letter to Air with the correction calculation as part of your tax records, even if Air didn’t respond.

I hasten to add this does not constitute tax compliance or accounting advice. Please consult with your accounting or taxation professional.

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This is a lot of revenue and a lot of tax you are paying commission on. Holy cow.

i know, i am working on that. Thanks

I live in Los Angeles, CA. I used to pay the 14% Transient Occupancy Tax out of my gross proceeds. The City Council proposed legislation to limit hosts to renting out Airbnb listings to 180 days per year. As soon as this legislation was proposed Airbnb began collecting the Transient Occupancy Tax from guests and remitting it to the city. I believe that this is standard operating procedure for Airbnb.

Ok so when you collect on Square, are you key entering it or card swiping? And do you charge them the square fee?
Thanks. That is some great information.