17 Replies Latest reply: Aug 7, 2019 12:10 PM by casitacresta RSS

    NEW MEXICO Tax question

    avrana New Member

      My short term rental is in Taos, NM.  For taxes I understand there are Occupancy and Sales Tax due.  Which one of these is "Gross Receipts Tax"? 

      I pay the Sales Tax due monthly based on gross revenue to the state one a month at a 8.5% rate.


      For taxes Homeaway instructs me to plug in by tax percentage.  I'm using the sales tax rate of  8.5% which is collected from tenants and then passed on to state.  What about Occupancy Taxes.  Are these being collected and paid by Homeaway?


      The other service collects Occupancy taxes and pays them on by behalf and the just sent me a notification that they will also collect and pay Gross Receipts tax as well after July 1st.


        • Re: NEW MEXICO Tax question
          margaret CommunityAmbassador

          If HA were collecting and remitting all or some part of your tax you should have been notified. If they are not then you will have to collect and remit all taxes that are due. The OTAS only collect and remit tax from locations that require them to do so. Some locations require ABB to collect tax but not HA/VRBO. some require HA/VRBO but not ABB, some require it of both companies and some don't require it of either. Call your tax authority or HA/VRBO CS to find out if tax is being collected and remitted for your location or if you are responsible to do it. ABB collects and remits tax for the state in my area, I am responsible for local/county. HA/VRBO does not collect and remit any tax in my location, I am responsible to handle all tax for HA/VRBO, other sites and direct bookings.

          • Re: NEW MEXICO Tax question
            ashevillelookout Senior Contributor

            You should be entering on Vrbo the whole, total amount that you are charged by your state, county and municipality for Sales and Use and Occupancy taxes, not just the state taxes.  My total tax rate as entered on Vrbo is 13%.  Vrbo applies that rate to the base rental fee, the cleaning fee, and any other fee that I charge the guest.  When I submit my monthly report to the state, it includes only the amount collected for those taxes; the remainder of collected taxes goes to my municipality In a separate report.

             

            When it comes to taxes, know what you are mandated to collect; do not rely on others (like Vrbo) to do it for you.  When I got into this business, it was my first question to my accountant.

            • Re: NEW MEXICO Tax question
              ha-moderator-michael HomeAway Employee

              Hello avrana - We do suggest that you contact your local municipalities (city, county, state) to learn more about your tax responsibilities.  HomeAway does not currently automatically collect and remit taxes for New Mexico.  We will start doing so for New Mexico State, County, and Municipality Gross Tax Receipts on July 1st.  You should have received an email notifying you of that upcoming change.  Any tax percentage you currently have established in your Rates settings means your guest is paying you the funds, and you are responsible for remitting and reporting.  More information on New Mexico Gross Receipts can be found here.

               

              Thank you,

              Michael

              HomeAway Community Moderator

                • Re: NEW MEXICO Tax question
                  avrana New Member

                  I have been paying the Gross receipts at 8.5% but not the lodging.  We do have the required permit and pay that annual fee.  I have not received an email from Homeaway saying they will start to collect from guests and pay the Gross receipts and lodging tax on my behalf. 

                  • Re: NEW MEXICO Tax question
                    casitacresta New Member

                    Sorry, but you're only collecting GRT and not any of the Lodging Taxes required by counties and municipalities. There is no way of adding a tax rate once you have started this as you have just done in New Mexico on July 1. The tax rate which I had, is no longer there. And, btw, the tax rate I had was correct at 7.125% and not the 16.375% that your rep told me was going to be collected.

                    • Re: NEW MEXICO Tax question
                      casitacresta New Member

                      How do I get someone to deal with the fact that HA/VRBO is collecting the WRONG tax? It seems as if they are just applying a blanket rate across the state or picking one rate when there are many, many rates all depending on location. The CS reps response to me was, "That's the rate NM told us and that's what we're going to do." Now, would you like to see how many tax rates there are in New Mexico? Please take a look.

                      d07efd8c-bb7f-4c28-9f97-020dc07b18b2?response-content-disposition=filename%3D%22July+-+December+Gross+Receipts+Tax+Rate+Schedule.pdf%22&response-content-type=application%2Fpdf&AWSAccessKeyId=AKIAJBI25DHBYGD7I7TA&Signature=%2BvNHc%2BgfMh1VNONl2gSVp1TcNr0%3D&Expires=1564691760

                        • Re: NEW MEXICO Tax question
                          ha-moderator-michael HomeAway Employee

                          Hi casitacresta -  I apologize for all the confusion.  There is a lot of complexity to the New Mexico tax requirements.  It is important to note that on the document you provided that breaks down the Gross Receipts Tax (GRT) there is more than one Edgewood in the state.  Upon first glance you immediately see an Edgewood listed with 7.8750% tax, but that is for Bernalillo County, not Santa Fe County.  If you scroll down that document, you will see the correct county for your rental - Santa Fe County, Edgewood with the tax of 8.1875%.  The 8.1875% is what matches what we show to be collecting under the Rates section of your dashboard.

                           

                          Now, another thing that is causing confusion is that you may be adding all the percentages up on this table to get the sum of 16.375%, but doing that is the incorrect way to understand what is being taxed and is not the percentage we are charging your guests.  We are providing the rates for each type of taxable amount for each jurisdiction, but the rate is the same for each type of payment for each of your jurisdictions.  Therefore, if you add 5.125 + 1.5 + 1.5625 you get 8.1875%.  This sum is what we are collecting and remitting and does match the correct Edgewood, Santa Fe listed on the GRT document.

                           

                          This fulfills our requirement to collect and remit state,county & municipal GRT.  State = New Mexico, County = Santa Fe, and Edgewood = municipal.

                           

                          We do not collect local accommodations tax. If applicable to a listing, this particular tax is the responsibility of the owner. Owners may request a separate payment from the traveler to cover this tax.

                           

                          I hope this helps to dissect the taxing. I am sorry for any frustration around the additional tax collection you may have to perform for tax that is not GRT, but I do not have another solution to provide at this time.  I did want you to understand what we are collecting and submitting as a baseline.  Please let me know if you have additional questions.

                           

                          Thanks,

                          Michael

                          HomeAway Community Moderator

                            • Re: NEW MEXICO Tax question
                              casitacresta New Member

                              AND if you scroll to the end of the Santa Fe section you will find "Remainder of County, location code, 01-001. AND THAT'S WHERE I AM. It is an unincorporated portion or Edgewood so we are not Edgewood proper. I would send you my quarterly tax filing except there is no way to do so securely on this forum. It shows my location code as 01-001 and a tax rate of 7.125%. AND, you do not address the fact that I cannot add a tax rate so YOU can collect the additional 4% that I must pay to Santa Fe County for Lodging Tax.

                               

                              All HA has to do is add a tax field, "Additonal tax required". That cannot be that hard. I'm seeing this problem all over the place.

                               

                              AND, I didn't add the rates, YOUR CS rep did and told me that was what guests were going to be charged. I told her she was wrong but she would have none of it.

                                • Re: NEW MEXICO Tax question
                                  ha-moderator-michael HomeAway Employee

                                  Hello casitacresta,

                                   

                                  Thank you for providing additional points of clarification.  Some of my confusion came from the information you added to your listing description that contains info around your thoughts on how much tax we may be collecting on your behalf. 

                                   

                                  Now that I understand that there may be an issue on how your listing is being taxed related to your municipal jurisdiction - I can have the matter investigated further.  Please look-out for an email from our support team requesting a scan of that quarterly tax filing document.  You are welcome to black-out digitally any information that you deem sensitive.  You can securely attach it to your reply of that support inquiry and we can then have the issue investigated further. 

                                   

                                  I did state in my original reply that we do not collect local accommodation tax.  We recommend that you request any additional taxes by creating an additional payment request.  I do not have another solution to provide at this time. 

                                   

                                  Thank you,

                                  Michael

                                  HomeAway Community Moderator

                          • Re: NEW MEXICO Tax question
                            casitacresta New Member

                            Beware the complex world of New Mexico GRT!

                            GRT is the sales tax of NM. It varies by location and the rental platforms, including VRBO, appear unable or unwilling to fix the tax mess they have created. The tax collection situation for vacation rentals (Airbnb & VRBO) here in NM changed as of July 1. The Platforms are supposed to be collecting and paying the appropriate GRT to the state. The rate varies by location across the state from 5.125 to 8.6875%. The rate for my location (unincorporated Edgewood, Santa Fe County) is 7.125%. VRBO (rep) has said they will be charging guests 16.375% and will not explain anything further. Airbnb has collected 9.24375% from two July guests and neither platform has any idea about the various location differences.

                            It appears they are just going to collect a bunch of money from unsuspecting guests and throw a bucket of money to New Mexico with no reconciliation or accounting.

                            There can also be a local, county or town, Lodging Tax. Santa Fe County has a 4% rate if you are not in certain areas, So, hosts must charge guests whatever other taxes we are liable for. In my case, it will make total taxes paid by guests of anywhere from 13.24375% to 20.375% when it should be only 11.125%. This is outrageous and a lot of NM hosts are going to lose bookings because of such high taxes and, hosts are going to have some very rude surprises when they find out they have not paid the local taxes they should have paid.

                            So far, I have concentrated my "discussion" with the other platform and they keep escalating the ticket to "a colleague better able to assist". I will be moving on to VRBO with a phone call because there is NO help in help!

                              • Re: NEW MEXICO Tax question
                                casitacresta New Member

                                In addition, once the platform starts collecting state mandated taxes, there is no (visible) way of adding another tax rate, county or town. I have to notify booking requests that there is an additional 4% tax that I must collect from guests when they check in.

                              • Re: NEW MEXICO Tax question
                                casitacresta New Member

                                If you haven't used it, NM has an excellent map and you can drill down to your exact location and see what your geographic locator code is, it's a six-character code with five numerals and a dash between the second and third numeral. That, and your quarterly/monthly GRT report tax rate should match. Then, it depends if you are in Taos city or county. But you are responsible for anything other than the state mandated GRT. And the GRT is sales tax.

                                 

                                BTW, I don't believe it was the rental platforms that decided they were going to collect, it was the state. However, the platforms definitely need to get it together and get it right. It's not their fault NM tax code is so convoluted but by collecting taxes in your name they have created a fiduciary relationship and are responsible for getting it right!

                                • Re: NEW MEXICO Tax question
                                  casitacresta New Member

                                  Sales Tax is Gross Receipts Tax and the platforms are ONLY collecting Gross Receipts Tax. Occupancy Tax varies by locale, at least in New Mexico. There may be an Occupancy or Lodging tax for county and or town. It is up to you to find out if and what. The platforms will be of NO help. They cannot even collect the correct GRT amount for your location. If you check the chart I posted at 2:29 today, you should be able to find your correct tax and it should match your monthly rate that you are reporting. I am going to bet it will not match what HA/Vrbo collects from guests. You will have to notify guests that there is an additional Occupancy/Lodging Tax and collect it yourself because once the platform starts collecting ANY tax for the state, the ability to enter a tax rate is lost.

                                  New Mexico hosts really have to get together on this and badger the hell out of HA, and any other platform they're using, to fix this mess. Tell your guests if they are being overcharged on taxes.