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I can add taxes so they are calculated!
Clicking the “add tax” button takes me to the “local laws” tab for the listing, which says that AirBnB doesn’t collectg and remit taxes, but there is new section which will now allow me to add the tax rates:
Clicking “Add a tax” starts the tax popup window, which I couldn’t copy all of. Not that the tax will be added to the bill and apparently AirBnB will remit the collected tax to me and I’ll be responsible for paying it, which I actually prefer.
It appears that AirBnB will no longer be remitting taxes to local taxing authorities, but will be remitting them to hosts, who will be able to download a tax report to use in filing the required tax payments. That really makes sense for AirBnB, who won’t have to jump through every jurisdictions maze of rules and try to write software to accommodate all of them. I makes sense for me, too, since I’d rather file the quarterly return myself so I can make sure it’s correct.
Why didn’t they do this several years ago? Anyway, I’ll let you know how it works, and whether it alters any of the 25 or so bookings I already have for the summer.
No, until today I had to collect the tax on arrival. I tried to charge them through Resolution Center as AirBnB recommended, but my first 2 guests never paid the request, so after that I was careful to notify before booking, again in my welcome message, and then had to collect on arrival. I have combo locks on front door and rooms so they could do self check in if I was working, and sometimes I couldn’t get ahold of guests for a day or two.
I’m convinced that was the reason for several 4 star ratings right when I started, which generated star level warnings from AirBnB. I’m still setting it up, but will finish tonight — apparently ABB wants me to rate their tax setup process, too.
It may only be a small trial. I called the city sales tax administrator today and he said that I was the second caller to ask, and today was the first he heard about it. The Alaska Municipal League, our statewide organization of local governments, was pushing AirBnB very hard to fix this, so it may be an Alaska wide test, but I don’t know any hosts in other places in Alaska to ask. Alaska doesn’t have a statewide sales tax, but some cities and boroughs (like counties in other states) have a general sales tax, and then other percentage based taxes. Here in Juneau we have a 5% sales tax except on rent, medical expenses, and utilities, plus a 7% tax on rentals 29 days or less, and a 10% tax on alcohol and cannabis which are added to the general sales tax. So my total tax here is 12%.
When I added the tax, it does display correctly when I do an anonymous Mozilla window to search for my listing with dates, and displays the total (including guest booking fee, cleaning fee, and taxes) in smaller font below the nightly rate on the search page.
Unfortunately, the other parts of the listing, including the house rules and other text items were either not set or completely gone after I saved the listing with the taxes added. Thank goodness I’m compulsive about saving every version of every listing on my hard drive! The copying and pasting is annoying.
OK, so it might not be the case that AirBnB will no longer be remitting taxes to local taxing authorities, but rather they are offering hosts where that service was not previously available a new option.
I assume the main benefits to this new option are:
For host that previously collected the tax directly from the guest, the guest doesn’t get hit with an additional fee after booking.
For hosts that rolled in the tax to their nightly rate, Airbnb won’t collect additional service fees on the tax.
That’s correct. But I’m willing to bet that once it’s up and makes it through the test period, that they’ll just stop remitting to taxing authorities and send hosts the collected tax in payouts, saving AirBnB from having to deal with all those local tax folks and giving hosts one more chore to do. If it works, that’s fine with me because I’ll have control of my tax returns and payments.
My take is that Air is tired of playing local tax whack-a-mole. I’m willing to bet that most taxing jurisdictions would be happy as long as hosts charge the tax and remit it to them, rather than having AirBnB do it.
My city wouldn’t do their previous way of making payments — just a check every month for all the tax, without saying which hosts were responsible to “protect hosts’ privacy”. The recently revised Terms of Service now notify hosts that their information may be shared with local tax authorities, which may be enough to satisfy many cities.
And it’s my understanding of the new STR MA law that sites like Airbnb are required to collect and remit the tax, not the host themselves since it wasn’t the host who was paid by guest but Airbnb on behalf of host.
I don’t recall if I had asked Jennifer about that but that section is, I think, quite clear in that whomever handles the rent payment must also collect/remit tax. Some other subsections are a bit more complicated.
I went to the law section you mentioned and I don’t see where it required Airbnb to collect and remit. I am not trying to make you wrong. I would want nothing more than to have Airbnb collect and remit the tax. I hate that I have to collect. If you think I’m misreading this please don’t hesitate to let me know.
So here’s that section. Often working bills get modified before they become legislation. but I am also going to reach out to my contact:
Section 13. (a) An operator may elect to allow an intermediary to collect rent or facilitate the collection or payment of rent on its behalf through a written agreement on an accommodation subject to the excise under this chapter. An intermediary that enters into a written agreement with the operator to collect rent or facilitate the collection or payment of rent on behalf of the operator of an accommodation subject to the excise under this chapter shall: (i) apply for and obtain a certificate of registration from the commissioner in accordance with section 67 of chapter 62C on behalf of the operator; (ii) assess, collect, report and remit the excise to the commissioner as described for operators in sections 3, 3A, 3B, 3C, 5, 7A, 7B and 12; (iii) assess, collect and remit the community impact fee to the municipality as described for operators in section 3D; (iv) maintain records of any excises collected that have been remitted to the commissioner and shall make these records available to the department upon request; (v) ensure that the operator is registered pursuant to said section 67 of said chapter 62C prior to permitting such operator to list or offer an accommodation for rent through the use of the intermediary; and (vi) notify the operator that the operator must comply with all applicable municipal, state and federal laws including, but not limited to, the collection and remittance of required excises.
I also think that this section points out
The certificate of registration obtained from the commissioner pursuant to this subsection shall identify and be in the name of the individual operator, not the intermediary.
I think that we as the Airbnb hosts have to obtain the certificate of registration so to me that further defines the host as the collector.
I have another questions for you Pleanant… (which I will also send to the DOR contact)
In regards to the actual tax collected I read somewhere that we are supposed to be a pay on the fees that we are charged and the Airbnb fees that guests are charged. Any thoughts?
Last point first: From the definitions in SECTION 6: "“Rent”, the total consideration paid by or on behalf of an occupant, including any service, cleaning or other charge, to an operator or an intermediary collecting and remitting the excise on behalf of an operator under section 13 for occupancy, valued in money, whether received in money or otherwise, including all receipts, cash, credits and property or services of any kind or nature. ".
As to the 3% CC fees that we are charged, I realized my initial view was wrong as that 3% is not an added amt but a subtracted amt so by charging tax on the rent totals, it’s by default charging tax on that but it then may reduce our payouts by a very minimal amt.
So -to your other points: in ‘(a)’, it defines ABB or similar as the collector of payments and then in ‘(ii)’ and ‘(iii)’, they are required by word ‘shall’ as last word in ‘(a)’ to be the tax collector and remitter.
And in ‘(v)’, it requires that ABB or similar have proof that we as operators are registered with DOR before allowing us to list our rentals there. I read ‘(vi)’ as that ABB or similar must disclose to us the requirements of this law but not that we are to be the collector/remitter.
This isn’t a working bill - this is the signed and enacted law!
Obviously I’m NOT a lawyer but have been quite thoroughly reading about this for some time and spoke at a Public Hearing against it in Hyannis a couple(?) of summers ago so have talked with Sen Cyr’s office a couple of times.