17 Replies Latest reply: Nov 11, 2019 3:31 PM by stephsellsdenver RSS

    How do you know which payments have tax withheld by VRBO?

    wkm2a Contributor

      I am in the middle of filing my quarterly tax for my state (Colorado) right now.  VRBO just started remitting state taxes as of Oct 1 for Colorado.  My question is, how do I determine which payments have had tax paid by VRBO and which do I still need to remit taxes on.  I have bookings that are made over a year out which VRBO has not paid the taxes on....and these will be co-mingled with new bookings which will have the tax remitted on my behalf by VRBO.

       

      Will I have to manually go through every single booking to determine which ones I need to pay taxes on?  The payout summary page seems to offer no help...anyone have a solution?

        • Re: How do you know which payments have tax withheld by VRBO?
          wkm2a Contributor

          I will assume that there is no way to do this from the lack of responses.  I will also assume a lot of people are massively annoyed and frustrated by this....

          • Re: How do you know which payments have tax withheld by VRBO?
            ohst8er Premier Contributor

            EASY.  Every booking you received before Oct 1st YOU collect and remit taxes for.  Every booking you received October 1st or after, VRBO collects and remits the taxes. 

             

            We keep a 3 ring binder with ALL of our bookings and the details that go with them, what they paid, that we have coordinated a cleaning, a copy of their rental agreement, any pertinent info we want to have "at a glance."  (in addition to keeping an excel spreadsheet for accounting purposes.)  My husband just marks on the first page of every booking so that he knows which ones he handles and which one VRBO has taken over.   If you don't have any sort of system already set up then yes you WILL need to go thru every booking to determine which ones are which.    

              • Re: How do you know which payments have tax withheld by VRBO?
                wkm2a Contributor

                It's not that easy...I have bookings made up to 18 months in advance.  The second payments on bookings made prior to Oct. 1 will be paid later and no taxes will be withheld by VRBO...so there will be a mix of withheld/non-withheld payments.

                 

                I have systems in place to track all of this but it is still massively annoying.  They could easily have added something to the payment reporting tools to show tax info...but like most everything else, little thought was put into implementation.

                  • Re: How do you know which payments have tax withheld by VRBO?
                    ohst8er Premier Contributor

                    Taxes come out of ONE payment, the FIRST.  So ANY monies received after Oct 1 for bookings made BEFORE oct 1 are STILL bookings where taxes are collected and remitted BY you.  Any time you switch from one system to another, or when you get a new laptop and have to switch over, etc, it's always a pain, but figuring out which one is yours and which one is theirs is simply when they booked.  See screen shot for your answer:

                     

                    Screen Shot 2019-10-13 at 9.20.34 AM.png

                     

                    You'll see this info on the right side of your inbox.  My magic date was Sept 1st.  Yours is October 1st.  Look down that column, the dates Oct 1 or AFTER are VRBO's, the ones BEFORE Oct 1 are YOURS to manage for remitting.

                      • Re: How do you know which payments have tax withheld by VRBO?
                        casitacresta Contributor

                        Sorry, but I disagree. It has nothing to do with when the booking is made. Taxes are not incurred until the stay. VRBO just tried to tell me I should be reporting tax on reservations when they're made. How do you handle cancellations? I just had a guest stay who booked almost a year ago and they refused to see they had the tax wrong and were insisting they were going to pay me the incorrect amounts collected. So, when I report for the quarter, I'm going to have x amount of gross rent for 5 reservations and only pay the tax for one?

                         

                        It does matter when VRBO starts state mandated collection of taxes. For NM, they started July 1. Prior to that they were collecting the rate we entered into our property listing and paying it to us and we paid the appropriate authorities. Now, they are collecting the state taxes due but not the county which we must deal with totally on our own because VRBO had eliminated the municipal tax field.

                         

                        CS reps and even supervisors do not understand complex tax situations. I had to have the issue escalated to the taxes and billing departments.

                          • Re: How do you know which payments have tax withheld by VRBO?
                            wildiris Active Contributor

                            You are correct in stating that sales taxes are not remitted to the state until after the guest stays.  (At least, that's how it is in my state.)  But - HomeAway collects the sales tax with the guest's first payment and holds it in escrow.  (If a reservation is cancelled and the rent refunded, the sales tax is also refunded.)  So, ohst8er is correct - if the booking was made after October 1st, then Vrbo collected the entire amount of the sales tax due with the first payment and will remit it to the State of Colorado.  If the booking was made before October 1st, you will need to report and remit the sales tax for that booking.

                             

                            And yes, Vrbo is only collecting the state sales tax.  It's leaving owners "out to dry" and is not giving them a line item for charging and collecting county and municipal sales taxes.  I think this is deplorable.

                            • Re: How do you know which payments have tax withheld by VRBO?
                              ohst8er Premier Contributor

                              casitacresta, you are conflating two issues.  The OP is asking "How do you know which payments have tax withheld by VRBO?"  In my situation, VRBO STARTED withholding taxes as of Sept 1st, other locations it is October 1st, others were before that, still others will be AFTER that.

                               

                              You only need to know TWO Things in this instance.

                              #1when are taxes paid by the traveler?  The answer is, WITH THE FIRST PAYMENT.

                               

                              #2 which bookings is VRBO responsible for remitting, and which bookings am I responsible for remitting?  The answer is clear, in my instance I am responsible for remitting taxes that I currently hold in my account, and those taxes are for bookings made BEFORE Sept 1st.  VRBO is responsible for remitting taxes on or after September 1st (again, for MY locale.)

                               

                              Who is responsible and when/how they are remitted are two entirely different animals. 

                                • Re: How do you know which payments have tax withheld by VRBO?
                                  casitacresta Contributor

                                  I was trying to make the point that no matter when the "booking" is made, or when payments are made by the guest, or which payment vrbo takes the tax out of, the tax liability only occurs at the time of the "stay". And it is correct that in NM, vrbo started the state mandated tax collection July 1 and any "stays" after that are their responsibility. Any "stays" prior to that, they are responsible for sending me the money they collected on my behalf and I am responsible for paying and reporting to the state. It does not matter a bit when the traveler pays the tax. There is no liability until they "stay".

                                  Not that anyone could tell but casitacresta is a he.

                                    • Re: How do you know which payments have tax withheld by VRBO?
                                      ohst8er Premier Contributor

                                      I don’t mean to keep beating the dead horse, but it absolutely DOES matter when the tax is collected, regardless of when it needs to be remitted. Taxes collected before the date when VRBO took over are the owners responsibility to remit, taxes collected after the date when VRBO took over, VRBO has the responsibility to remit.

                                       

                                      As I stated in my previous post, when they are remitted is entirely different from who remits them.  Those two ideas need to be kept separate. Get them confused and you’ll have an even bigger mess to deal with.

                                      • Re: How do you know which payments have tax withheld by VRBO?
                                        wkm2a Contributor

                                        My point was as casitacresta said.  I don't care when the taxes are paid by the guest...they are not due to be paid at that time by me.  I pay taxes on payments that are made to me in the current tax quarter.  Now (after 10/1) a portion of those taxes will have been remitted by VRBO and some will still need to be paid by me.

                                         

                                        If I get $1000 in the first tax quarter and $4000 in the second, I only pay taxes in the first quarter on the $1000.  In the second quarter I pay taxes on the $4000.  Now, I will need to know if taxes have already been collected/remitted by VRBO or not for each payment installment going forward.  Yes they collect the tax with the first "installment" but that tax is not remitted in its entirety until all payments have been made....and that could take place over different quarters or periods of time.  Does that make the situation clearer?

                                         

                                        Sorry if my initial description of what I was asking was not as clear as I thought it was...I can see how you could have misunderstood what I was saying.

                                         

                                        Also my main point is that VRBO should add something into their reporting to just state whether they are remitting the taxes or not for each payment within their reporting tool...to not do so is just lazy.

                                          • Re: How do you know which payments have tax withheld by VRBO?
                                            ohst8er Premier Contributor

                                            wkm2a, understood.  All we can do is reply based on the question and info we received in the original post.  My comments still stand though, it is important to know WHEN the booking happened.

                                             

                                            Here's a perfect example.  I have a guest check-in in in a couple days.  They booked in September.  Because VRBO took over the collecting and remitting and taxes as of September 1st, VRBO will handle remitting the taxes during the month of November (the month of the guest's stay).

                                             

                                            I have another guest checking in the end of December.  They will be staying thru Mid March.  THIS BOOKING booked long before September 1st, they are staying for over 70 nights, (that's ALOT of tax money), the taxes were collected by ME, and will need to be remitted by me during the months they are staying.   This is why I am saying, it's important to understand WHEN the booking happened.  If I were to get this confused and think that VRBO is remitting the taxes for that over 70 night stay because the stay occurs AFTER September 1st, that would be a costly mistake on my part.

                                             

                                            as far as VRBO being “too lazy” to put in a line saying whether or not they are remitting the taxes for each booking, see my post above. You already have that at a glance information in your inbox.  you don’t even have to click on each booking to know which is which entity's responsibility. It’s right there.

                              • Re: How do you know which payments have tax withheld by VRBO?
                                wildiris Active Contributor

                                I have a system that is similar to ohst8er's system.  About half of my bookings come from Vrbo and the other half are direct bookings.  Unless all of your bookings come from an OTA such as Vrbo or AirBnB, you will have establish a system to differentiate between bookings that are having the sales tax collected and remitted by the OTA to the State of Colorado and bookings that you will have to collect and remit the sales tax.  For me, the easiest way to see this is on the Excel spreadsheet that I have created for all my bookings.  I highlight the bookings for which I have to remit the sales tax myself. 

                                 

                                Per my state's revenue department, I must include all of the bookings from whatever source in my gross sales figures.  The dollar amount of bookings that were made through Vrbo are then listed as "exempt" sales and that amount is deducted from my gross sales amount.  You'll have to check with the Colorado Revenue Department to find out how they want you to handle the different types of bookings on their form.

                                • Re: How do you know which payments have tax withheld by VRBO?
                                  stephsellsdenver New Member

                                  We have two properties in CO and figured out they are not taking 7.5% for one city and 8.8% for the other. NOT GOOD!! Either way, we are going to eat it! Can't imagine good reviews when I inform you you owe me another $500!!