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But I’m renting a room in my house. I’m not a hotel.
What happens to the 3% that Air charges the host on the $100 night? Which really makes it $97 before it’s taxed?
I agree that Air leaves a lot to be desired in terms of compliance with taxes and helping their hosts be compliant.
Slightly off topic, I just ordered some new bedding from Amazon. They did not charge me Hawaii excise tax. I’m Ok with it. :)[quote=“Billy_Bob_Merkowitz, post:52, topic:2390”]
There is absolutely NO reason that they can’t operate like all the other businesses out there that put guests and hosts together.
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On another forum, a member put together an informal survey of tax collection practices in Hawaii. I should find it.
By the way, I choose not to list my Tax ID number on the Air site. It’s an account that is directly connected to my state and federal income tax accounts, and I don’t feel comfortable sharing. It’s the one thing I am not compliant about, but I do have my license framed and displayed inside my rental unit.
I believe the businesses have to have a nexus in the state for excise to be applicable. For example, if I order something from Apple or Victoria’s Secret, I pay tax because they both have stores at Ala Moana Mall in Honolulu. I think it may be coming soon for Amazon to Hawaii though. Something tells me that the state is fed up with losing millions on Internet sales.
BillyBob thank you for info, I am sure we all will contribute from it. You obviously care about tax situation
I don’t know where you get the impression that there is something I am doing wrong as far as taxes go. What are you basing your opinion on that I have no clue? I am running my own business ( not rentals), and for the past 20 years I am doing my personal income tax return, and also all my business related taxes. AND also Airbnb and other rentals. What should I stop doing what I am doing?
When I went to the office they said that I did not have to file since I was not the one collecting the payments.
It says in the Florida regs “Q. My rental property is always handled by an agent. Do I need to apply for a tourist tax account number?
A. In most cases, the rental agent has their own tax account number, and will submit your resort tax in a consolidated tax return, which includes the rental property of all their clients. However, you should be aware that you, as the property owner, are ultimately responsible for the required tax being paid. Any failure by your rental agent to pay the tax may result in penalties being applied against you, as property owner.” from the Martin County tax website.
When I went in personally, I was told that if I apply for a tax account, I will have to pay the tax. It does not matter if it is paid by someone else, the coupon is in my name and I must pay it. Airbnb gets their own coupon. They must register.
Yes it is… but it just presents another mathematical dilemma. If I have a room for $100 a night and add my occupancy tax of 13.45%. If add that to my room rate, my rate becomes $134.50. Air takes their 12% cut on that total from the guest and then takes 3% from me. What is my actual real take? Should Air be charging a commission on tax?
Read Esturato’s article… very interesting! Where he concludes:
b) At the least provide hosts a tax field to charge guests that does not have AirBnBs commissions tacked onto it.
No matter how you feel about collecting tax, and whether or not you agree collecting in cash is acceptable, you have to agree this is a mess. It’s not like I love collecting in cash. It’s not like I love greeting the guest and asking for tax (even though they’ve been told) or telling the guest they have even more due after they already paid for cleaning, a room and put a deposit down for security.
Yikes! Are you taking about the “sales” or the “accommodations” or both? You are saying Air collects it and you don’t get credit, so you’d have to collect it from the guest also, and they end up paying twice?
Hawaii has excise and TAT for a total of 13.45%. Right now, it’s up to the host to collect and you have to because your excise is tied to your federal and state income taxes and it all has to balance out.
This is what I wondered about… How would Hawaii credit the occupancy to your account? And what’s a bear is you would also have to shake them down for an additional 4.167% excise which is on YOU to get. Air won’t pay that for you out of their TAT collections. I could just see how our state could really screw it up, and I’d really just prefer to collect my own excise and TAT and send it in to the credit of my own account.
Now what about under your gross earnings tab where it shows the amount Airbnb is submitting on your behalf? Surely this must account for something as far as credit.
Let’s say you were to get audited by the state and didn’t have this agreement. However, Air issues a statement saying they have paid such and such amount on your behalf…is the state not going to accept this?
Air really needs to be giving us copies of the guest reservation and what the guest is paying. I just remember the law in NC is that when a “facilitator” is used for payment, the facilitator has so many days (I believe 10) to forward me the tax money so that I can pay it. If the facilitator does not do this then the facilitator becomes responsible for the taxes (whether they collected them or not). So in essence, all the years I collected on behalf of Airbnb…it was really Airbnb’s duty to collect and either forward them to me, or pay the taxes themselves.
This law makes total sense. I mean where do you ever make a purchase and then have someone else collect the taxes in cash. I swear this all so that later down the road Airbnb can try to pass legislation that says all vacation rentals need to go through them to be legal…because will make sure the taxes are paid!
When you say facilitator… say you booked a flight through Expedia… they are the third party agent. Expedia doesn’t operate the flights themselves, but they DO collect taxes on behalf of the airlines. They are, in essence, the booking agent. The airline doesn’t come to you later and say, hey you owe taxes…
Am I correct in picturing Air B&B in this role as third party agent?
If so, then why isn’t AirBnB taking more responsibility in their role as third party facilitator?
In NC the definition of a facilitator would be the third party booking agent that also collects payment from the traveler. They are supposed to collect the tax at that time. And in NC (like many states) the traveler booking fee is also taxed at the sales/occupancy tax rate.
So in my case Airbnb and Flopkey are the faciliators. Even though I am listed on Expedia and Booking.com - they are not considered facilitators because I collect payment directly from the guest (so my responsibility to collect the tax). But for those where Expedia collects payment, then yes they are the facilitator.
Why isn’t Air taking more responsibility?? I have no idea as many OTAs (online travel agencies) are being sued by states for back taxes on lodging. My first conspiracy theory was so that Airbnb could technically collect 3% on lodging tax and also bill the traveler for 6-12% on lodging tax. OK…well that makes sense BUT why would they want to blantantly break the law?..I don’t know.
My other conspiracy theory is that I believe all the listing sites will eventually try to merge so a complete monopoly is formed. They will try to pass legislation that says individual owners cannot be trusted to collect taxes so they MUST list on our site so that we can be certain the taxes are collected. So then we would be slave to paying whatever commission/fees the listing sites charge. Under this theory…let’s say I have a prosperous website of my own. Well now I am an “illegal” vacation rental business because I am not listing on a legitimate listing site.
The same goes for realtors who want all vacation rentals to be managed by them. They try to get legislation passed saying that individual owners can’t “professionally manage” a vacation rental. They try to paint a picture that individuals are offering dumps and it takes a “professional” to make sure it is done right. We all know this couldn’t be further from the truth. There is no way a property manager will manage a property better than an onsite owner or even offsite owner who is committed and hands on. Can you imagine a property manager providing a better experience than someone who knows their home inside and out to answer guest questions- and someone who cleans it hands on? I’m sure I clean better than a cleaning service. Now no one will ever match Billy Bob’s standards…that’s for sure
And to add to my previous comment…I think Airbnb is trying to look like the hero to these states. So another theory is that Air knew the homestay business would explode. They knew that goverments would try to ban. So then they strategically would all of a sudden approach the goverments and appear to be the heros, ensuring the states/counties get their fair share of taxes due.
Oh mannnn! I just recently caught Travelocity trying to pocket an airline booking fee that was supposed to be, by Federal Law, fully refundable! I complained loudly… this is a federal law… you get a full 24 hours to change your mind on any flight, with a full refund due… they said they would refund as a “one-time courtesy.” Oh sure. How many travelers do they get who don’t notice that they pocketed the fee on something that is mandated to be 100% fully refundable in 24 hours?
So Bob either the guest is going to pay double or I will be shorted 6% sales tax? I work with Alvara tax solutions So I did get the License and Tax ID number. What have AirBnb stated to you? Are they clueless, You are right this is a nightmare.
We do know that about him!