I had included the tax in my rates but now got notification that airbnb will start collecting taxes in my state. How does this work? They charge the guests on a separate line and then deposit those with the rental amount into my account?
If I understand it right (my state doesn’t do this yet) AirBnB collects, holds, and makes the payment. When I called my state to ask how I should handle taxes they said that since Air collects the payment they’re the one’s responsible for paying taxes.
Watch your market and their pricing, because you may not need to reduce your pricing and may end up with more money
In states where they have set up tax collection Airbnb collects the tax on your behalf and pays it directly to the state themselves. The amounts look wrong because they pay tax on their service fee as well. They recently started doing it in my state, South Carolina. They do not collect the county and town tax that I have been collecting and paying separately from the state. I get bookings from other sites and from direct renters so I still have to pay the state tax from those as well as the county/town taxes. So it’s actually more complicated for me now that Airbnb started doing this.
That WILL be complicated! VRBO just collects the tax amount I specify and sends it to my bank and then I file and pay those taxes quarterly.
AirBnb collecting and paying the taxes is great! You do absolutely nothing. The taxes are collected from the guests over and above your daily rate, so you don’t miss any money; no need to hassle with your local and state tax agencies; just be a good host. If you’re already paying taxes, just stop. No one is going to come pounding on your door demanding back taxes!
You need to figure out if they are collecting the entire tax or just part of it. Then when you go to file quarterly, you will have to calculate what was turned into the state, what was turned into the county, etc. from all of your bookings.
I file monthly. The state said I could put Airbnb sales under “exempt.” Just don’t assume they are collecting the full tax amount. Be sure to verify it. I would recommend even testing trying to book your property as a guest, but not actually going through with it.
So some are saying they only collect the state tax , others say all taxes. (City and county too, and in my case there’s a local marketing district tax.)
In the email I got from them they didn’t specify.