23 Replies Latest reply: Oct 2, 2019 4:54 PM by casitacresta RSS

    How do we know that VRBO is sending our tax money to the state correctly?

    twinmountain Contributor

      I'm getting conflicting stories depending on which rep I talk with.  One rep says that I gave them my tax ID number when I signed up, which I don't remember doing.  Another rep says no, that the tax payment will show VRBO as the payor and that it will reference our street address.  I"m sure the state tax agency will love that one!

       

      Along the same vein, a different rep says that at the present, there is no way to see what VRBO is paying on our behalf.

       

      It sounds to me that I could easily be hung out to dry if the state audits me as I will have no information from VRBO to refute the claim!

       

      Now Ruidoso is charging a 5% lodgers tax and there is no graceful way to charge the guest for it!

       

      I've been using VRBO a long time, but they keep tightening the screws.  Another pet peeve is that I can't understand 3 out of 4 reps.

       

      Oh well!  Sorry for the rant.

       

      Joe

        • Re: How do we know that VRBO is sending our tax money to the state correctly?
          greggt Senior Contributor

          HA says "Trust us, we know best"!!

          • Re: How do we know that VRBO is sending our tax money to the state correctly?
            margaret CommunityAmbassador

            Ha/VRBO doesn't collect tax for my location but ABB collects the state tax. When this began I called the tax authority to get clarification on the situation. You may be wise to do the same. As I understand it, the site is being required by the state and/or county to collect and remit tax. The tax is paid to the State and/or county under the site name in a lump sum for all properties in that location. There is no record of the tax being paid directly to your tax ID or property address. You are still required to file tax for any bookings taken from other sources that are not collecting and remitting tax in you location. When I file my tax each month, I do not include the bookings made through ABB for the state, I submit those as zero. I still remit the tax to my county as ABB doesn't collect those taxes.

            • Re: How do we know that VRBO is sending our tax money to the state correctly?
              feibus Senior Contributor

              HA has legal agreements with certain states/counties/cities to collect and remit the tax money.  Doesn't matter whether you trust them or not, they have a legal obligation now (that they call a "voluntary agreement") to perform this operation on behalf of those states/counties/cities.  So they will.

               

              In Florida, the state has told owners/operators who book exclusively through Vrbo and AirBnB that they can close their sales tax account completely and not worry about it.  Check with your state/county/city dept of revenue/taxation to see what they advise in light of the collection agreement Vrbo has entered into with that particular state/county/city.

              • Re: How do we know that VRBO is sending our tax money to the state correctly?
                twinmountain Contributor

                A supervisor called me back last night and walked me through downloading a CSV file which he says will show a breakdown of payouts to the state for any selected time period.  If that works, it will satisfy my concerns.  I can't test it yet because VRBO will pay the state portion for the first time at the end of July.

                 

                From the Dashboard, click on "Reservation Manager", then "Payments", then on the download icon (arrow facing downwards).  Select desired dates, then click on "Submit" and be patient.  Takes a while.

                 

                I'm sorry if I "sounded" snippy with my posts and I assure you that it's VRBO, not the people that replied to me that is the root of my dissatisfaction.  When I first started with VRBO in 2009, it was a great place.  Now days not so much!

                 

                Thanks to everyone that responded!

                 

                Joe

                • Re: How do we know that VRBO is sending our tax money to the state correctly?
                  ha-moderator-christi HomeAway Employee

                  As a heads up here is a little more information-

                   

                  What happens when my jurisdiction changes the tax rate?

                  In jurisdictions where HA collects and remits:
                  If the tax rate applicable to the traveler’s stay dates increases after the traveler has booked, no additional tax will be collected.  We will cover any under collected tax out of pocket.  Additionally, should the tax rate decrease, we will still remit all taxes collected.  We will not keep any over-collected tax.  New tax rates will be updated as they become available.  The new tax rates will only apply to bookings made after the tax rate has changed. 

                  In jurisdictions where HA does not collect and remit:
                  The partner will need to review his/her local tax rules to understand how new tax rates are intended to apply and whether additional tax is due from the traveler.  Partners are responsible for keeping their tax settings updated.

                  Do I need to file a tax return if you are collecting and remitting taxes?
                  You may still need to file a tax return after we begin collecting and remitting tax in your area. In many jurisdictions, owners are required to submit a tax return for stay taxes even if the amount of tax they collected is equal to $0.

                  Additionally, if your property is listed on multiple sites, you may still have a tax filing obligation on reservations booked on other sites. You should check the reporting requirements for your jurisdiction by contacting them directly or consulting with your tax professional to avoid penalties for not reporting.


                  As a side note in any jurisdiction where VRBO/HA has an agreement to collect taxes voluntary or not they have the tax liability for anything booked through VRBO/HA and all other VRBO/HA owned sites.

                  What Stay Taxes/Lodging Taxes do you collect and remit? | Vrbo Help


                  I hope this helps.

                  • Re: How do we know that VRBO is sending our tax money to the state correctly?
                    irecat Contributor

                    I have been on VRBO/HA since 2008 and this is my second year with them paying the local/state lodging tax, it is weird to me to find the percentage in my area to be different in calculation (not the percentage due) than what is being charged to my guests. Not sure how they (VRBO/HA) are coming up with that little extra padding, but not one figure that I put on my invoice to my people so they see the actual breakdown has been the same. This year 2019, I no longer put any information on my invoice to them, that shows anything, but what I am to be paid. Perhaps a little extra to VRBO/HA's pocket. It would be nice that this is clarifed as well.

                     

                    I also agree with the not being able to understand their reps. Best of luck to you twinmountain with your rental season

                      • Re: How do we know that VRBO is sending our tax money to the state correctly?
                        feibus Senior Contributor

                        If you think the calculations are wrong, please please please call CS today and work through it with them.  It's possible that it IS wrong, and most states make it illegal to collect more sales tax than the state's rate allows.

                        • Re: How do we know that VRBO is sending our tax money to the state correctly?
                          casitacresta Contributor

                          I fought with VRBO for weeks before I finally got them to charge the correct (sales tax/GRT) rate for my area in New Mexico (instead of 9-16% as originally proposed). Now, the first booking, I looked at the tax they are charging the guest and instead of 7.125% it's coming up around 7.9+/-%. Come to find out, they are charging the guest, ON MY BOOKING, tax on the fee guests pay to VRBO. Seems to me they should be charging the guest, and taxing them, totally separately from my booking. They are collecting all these various amounts and sending the state a bucket of money with no accounting of where the money is coming from nor what it's for. When NM finally gets wise and starts asking for accounting I would not be surprised to find out that what they're doing is illegal. I can't imagine VRBO has it's own tax account with NM which it seems to me, they should have. They should be collecting taxes on the fees they charge and paying on their own account and not on mine. And good luck talking with CS reps about taxes. I tried on both platforms and they haven't a clue!!

                            • Re: How do we know that VRBO is sending our tax money to the state correctly?
                              feibus Senior Contributor

                              In many states, the service fee should be taxable, since it's a fee required to book your home on that platform, so it falls under the statute as a necessary charge and is taxable.  Like mandatory post-stay cleaning.  But this will be up to the agreement they put in place with NM and you likely won't be able to see the agreement without an "open records" request.

                                • Re: How do we know that VRBO is sending our tax money to the state correctly?
                                  casitacresta Contributor

                                  Hi feibus,

                                  I know the fee is taxable, virtually everything in NM is except groceries. My issue is the "platforms" collecting it on my tax id. And, it raises the question, are they paying tax on the fee they're charging hosts? If yes, why isn't that included in the "taxes collected on my behalf"? The tax on guests' fees are certainly not on my behalf yet they're presented that way. I have yet to file my third quarter return so don't know how NM is going to handle payments I don't have to make, but if it's as snow says and I am to claim exemption, I'm guessing platforms lump sums are not going to match because of taxes on fees.

                                  And I cannot for the life of me understand why there aren't hundreds of hosts discussing this especially as more and more states are included.Do hosts not realize they are liable?

                                  I think at least those of us watching this aren't going to get caught in a mess as those that aren't paying attention might.

                            • Re: How do we know that VRBO is sending our tax money to the state correctly?
                              snow New Member

                              The state of Maine also started collecting directly from vrbo. I was concerned with my property properly being credited with the correct lodging tax so I called the state taxation department directly. The tax guy explained that vrbo's portion of collected taxes I will show as an exemption on my quarterly return. When vrbo files a return to the state they do not indicate individual the addresses they collected on behalf of, but their lump sum must match the total of exemptions made by rental owners. As owners we have record of rentals done through vrbo and other booking sites and that is our tax record. Vrbo is responsible directly to the state period. That is the simplified version in a nutshell in the state of Maine. I am sure it is similar in other states as well.

                              • Re: How do we know that VRBO is sending our tax money to the state correctly?
                                apollocabins New Member

                                I came late to the party, but VRBO doesn't seem to be sending sales tax to the state where my property is located (TN).  They collect the correct 12.75% on my rents and cleaning fees as required by TN.  They collect the sales tax and include it in my payout that VRBO deposits into my business account.  Each month, I have to go online to the State of TN and enter my gross income (rents+cleaning fees) and it calculates what I owe and I send it in via ACH from my bank.  I have to do basically the same for my County, who gets 3% of the 12.75% collected.

                                  • Re: How do we know that VRBO is sending our tax money to the state correctly?
                                    casitacresta Contributor

                                    Hi appollocabins,

                                    They are collecting based on what you entered in the tax field. You're lucky. Wait until they start collection as mandated by TN. (And they will, all states are getting on to this method.)Then, like in NM, they will only collect the state tax and not any local tax and, they will remove the tax field so you won't be able to collect that 3% unless you 1) bill guests separately (doesn't look good from a guest standpoint), 2) pay the tax out of your own pocket or, 3) as we did, up your rate a bit so the tax is shared guest/host. Then, you will find they will be charging the guest tax on the fee the guest pays to VRBO on your tax id.

                                    Keep watching.