I am in VA as well (Albemarle County). VRBO does not collect the Transient Lodging tax (thank you big hotel chains who lobbied for this) for me either.
When the law was first passed (5% in my jurisdiction), I just increased my rates by 5% to cover it. You have to file the tax regardless of the rental source so just increase your rates from here on out by 7% and call it a day.
I don't think that VRBO (or any platform) are or ever will be set up to pay this tax on our behalf because it's based on gross income (less cleaning fees). Even under the best of circumstances, VRBO only has visibility to what they collected on your behalf. Assuming you use other platforms, you will always need to file as only you know the full monthly gross income. It's a PIA for sure which is why I chose to raise my rates across the board by 5% and move on. Not worth overthinking it.
The problem I have with just raising the rates is two-fold for me. First our local tax rate is 9.5% so that is a big jump in rental rates without the guests understanding that it is actually a tax. The second thing is that additional 9.5%, if added to the rental rate, is then taxed at the state rate so the tax is being taxed. That is illegal.
I just dont understand why VRBO took the option away from the homeowners to add the tax in with a percentage tab. Its great that they are collecting the state tax but we the homeowners still have to pay the local. ALL I AM ASKING FOR IS MY OPTION BACK TO IMPLEMENT A PERCENTAGE BASED FEE !!!.
I also have a house in Florida- VRBO collects all my taxes here!!! I just have to physically send the local payment in, so what is the big deal in Virginia?
I think by law if they are the entity collecting the payments they should be liable for the tax!!!
VRBO, like many 'transaction facilitators' has been caught in the whipsaw of state indignation surrounding STLs that do not collect and remit the necessary taxes - or worse collect but don't remit. The legislatures in many states decided to pursue the facilitators (on-line booking agents) as a means to collect these taxes. VRBO had no choice but to acquiesce. For my state, Indiana, VRBO has managed to collect the state sales tax as well as the individual county lodging taxes. I don't understand why some states seem to be so problematic.
What concerns me is the reported uncaring attitude VRBO has displayed in states where there seems to be some difficulty processing local tax collection. A company with their vendors well being and relationships at heart would at a minimum explain why the situation has arisen, acknowledge that it is not the best scenario for the vendors they rely on and commit to pursuing a corrective action asap. If the problem is with the state demands and inability to provide the information needed such should be communicated. It would then be up to the vendors to contact their local representative and demand a change in process.
With the recent explosion of STLs more changes and regulations are in our future. What was a nice cottage industry became a big target when the online behemoths (Air Bnb, Expedia, Trip Advisor, etc.) saw a potential to monetize each transaction and property.
As owners we take the risk and they reap a good portion of the bennies. That is our new reality.
Our STR is in Lancaster county where the local tax is 1% and is taken out of the 5.3% total for Virginia. When this first came out that Homeaway was collecting and paying the taxes I contacted the Virginia Treasurer's office and was told the following:
1. Virginia is requiring Homeaway/Vrbo and others to collect the taxes and pay them directly to the state.
2. We are required to also file form ST-9 on any rentals not going through Homeaway/VRBO (nothing new here)
3. We are still required to file form ST-9 monthly even if we had no income; same as always.
4. Homeaway/VRBO is the beneficiary of the "Dealer's Discount" It's not much individually but when multiplied by the number of STR's in Virginia, could add up to a tidy sum.
5. The liability for paying these taxes is shifted to Homeaway/VRBO on payments received through their platform.
Next I called Homeaway and was told:
1. We will not receive any confirmation that the taxes have been paid, but it does show up as a charge to us on the payment page.
2. The state requires that 'all fees' be taxed including cleaning fee and pets fees. Since I don't pay our cleaning lady over $600/year I have let her know that her taxes on any income she receives from me, assuming the traveler came through Homeaway, after July 1, 2019 have already been paid. Not sure how she proves that.
3. When I asked to whom Homeaway was reimbursing the 'Dealer's discount', the traveler or the owner, they said they had no plans to reimburse anyone.
I'm not sure why Albemarle and Bedford Counties would have a different set-up from Lancaster, but perhaps mentioning that there is an additional County tax in your write-up (if that;s allowed) would help and then just edit the quote.
Sorry, I know there is a lot of old news here.
I am glad to find this thread, as I have been calling and searching and emailing about this. This is certainly a step backwards! I have been sending a separate request for the taxes to my guests on Airbnb for a couple of years. Just for the record, to address this statement, "As a renter, I would be really upset if I got an additional payment request", not one single guest has objected because I explain it very clearly in my listing, again in my House Rules, and again when I send the request. I just tell them that it is a requirement and that Air doesn't collect it so I must do so. The thing is, I was always so happy that VRBO collected it, up front, for me. This is, as I said, a step backwards, for me. Now I have to collect it for both Air and HA. When I contacted HA about it, asking, "What is this 1% city tax you say you are collecting? Who is getting it? Does that mean I only collect 7% from my guests, instead of 8%? What's the deal schlamiel (not really)? They sent me some cut and paste answer and were a little rude about it. So silly.
The best is yet to come, now VRBO will hold all our money until the guest arrives. I dont know what this does to everyone else's cash flow but mine has gone from bad to worse. VRBO and Yapstone will hold all of our money and collect all of the interest in their accounts! The only alternative is to pay an additional 3% to Yapstone to get the same payment disbursement we already had and who's to say how long they will honor that arrangement. My only alternative is to raise my rates. My property in Virginia will probably survive however my property 6 minutes away from Disney in Kissimmee a 5 bedroom 4 baths and a private pool house at $99.00 a night just to be competitive, WILL NOT.
3 big changes have occurred in less then 12 months-
1. they have taken away my ability to collect my rent directly on my property - do I dare say MY property.
2. They have taken a way my ability to collect local taxes with a percentage base fee key for the local taxes. I think this was done so the renters wouldn't have the perception that VRBO was double taxing them. I guess it is OK that the renters think the owners are scamming then when we ask for another tax payment. Oh and by the way, is the additional tax payment also withheld until the guest arrives?
3. Now they are holding all of our rental money, in some instances up to a year.
As a homeowner I feel like a hostage!!!
We live in Albemarle County and I just had to request additional payment from our guests coming in October for the county transient occupancy tax. This is time-consuming as well as confusing to the guests. I had to explain it several times to one guest who eventually paid. I don't know why VRBO can't include a line for additional taxes with explanation in our rate settings. This seems simple to me without any downside. I have called VRBO several times only to be told that "we are working on this." It would be nice to get updates on this rather than be left in the dark.
I too am in Albemarle and I just raised my rates by 5%. I don’t bother the guests with this nonsense.
So, in effect, I pay the taxes for my guests but the rate increase keeps me whole.
IF the ability to collect the transient lodging taxes is provided down the road I’ll use it. Meanwhile it’s not a big deal. Paying them is a manual process anyway.
There are 2 issues if you raise your rates..
1; state tax is collected but not owed on the increased amount
2; you are no longer competitive with real estate companies, Vacasa and the like at they still collect and pay their own taxes. With a high local tax your listing then shows a much higher nightly rate in the search.
To the contrary, I am free to raise my rates to whatever I want and the state tax is collected on that amount. If I say, "other taxes paid by owner" then what's the real beef?
In any event, my county shows over 500 STRs and, at last count, only 75 were registered and paying taxes. My guess is the county will go after them way before questioning my math.
I agree with you that if raising the rates impacts your competitiveness, then it needs to be done carefully. In my case, I have only 2-3 competitors and I am by far the nicest... I think I am still under charging.
An update from a frustrated owner. STILL no ability to collect the 7% county tax in Bedford County Virginia in the initial payment. I have been requesting additional payments to cover the taxes and needless to say I'm 50/50 with guest reactions to this payment, even though I put that it's coming in the agreed to house rules, and in my acceptance note at the time of confirming their reservation. Frustrating to everyone. Two more points/questions on it
1- why doesn't VRBO have "tax" or "other" listed as an option in the pull down menu of additional fee types? If this is your solution to my county tax issue, allow me to communicate properly to my guests on what this additional payment is for. Right now the least worst option is "administrative fee" which again leads to confusion on the guest part.
2- is there a credit card processing fee on additional payments? If so, I now need to charge my guest 3% more than the tax so I don't have to eat the processing fee. I know it's petty, but I'm running a business here and want to ensure I understand where all the money is coming and going from.
Any answers from the VRBO team on this. Also, would like to know when I'll be able to put the tax back into my initial payments!!! Solve that and all the other issues go away! It's been MONTHS and it's resolved in other areas, why not in Virginia!!!!!!!
I feel so badly for you and all the other owners where Vrbo is only collecting one of the two taxes. I would cringe having to tell the guest that more money is due, and double-cringe again when having to send an additional payment for tax to the guest . With the semblance of a sophisticated booking platform, a guest would surely question why the tax wasn't listed and collected by Vrbo.
To your questions, I recall many owners have sent feedback requests to Vrbo to improve/expand the fee list and additional fees. It's horrible and not reflective or inclusive of many types of fees owners of VRs need to charge. It's almost as if someone who was in charge of this list had never stayed at a VR. I would just continue to send feedback using the feedback button.
For the credit card processing fee, yes, any payment, including additional payments, that are processed through the credit card processing incur a 3% fee. Many owners just bake this into their rates as it's a cost of doing business.
I think a consideration is to evaluate the guest reaction/perception and extra steps to collect the additional payment from the guest vs. just upping your rates, or adding a daily "Administrative" Fee of an overall amount you feel will cover your average costs for the tax. Yes, upping your rates will be far from perfect, and you'll never purely balance out. But it can create a better experience for your guests. Again it's not perfect, but it seems to be the approach others are taking. bonesxxx had some good suggestions.
homeaway_community_manager any updates for Virginia Counties who are still unable to collect the county taxes upfront? It's been MONTHS!!!!! Even with your suggestions of having it in the house rules it's still causing a lot of confusion. There also isn't an appropriate "fee name" in the additional payments area for me to put County Tax. The best worst option I have is "administrative fee" which causes even more confusion.
If it were me in this unfortunate situation, rather than increasing my nightly rate to cover the 7% county tax, I would likely add a nightly "Property" rather than "Admin" fee under the Custom Fee options. This way your "published" nightly rate is not inflated in relation to your competition's nightly rate. It will never be 100% accurate considering your nightly taxable rate (and thus your 7% county tax) would vary from a fixed amount and also because your guests will also be charged the state tax on that additional fee. Perhaps a fixed amount that approximates 6% of your average nightly rate (7%+/- the state tax)? I might also mention in my listing's Rates Notes that the "Property" fee is to cover the 7% county tax . Here are some print screens of a test I did by adding a "Property" Fee of $50/night. Note, that the $50/night fee ($200 for 4 nights) did increase the "lodging" taxes by $20 AND the HA Service fee by $19 so the guest is paying an additional $39. Bottom line, ask your county to work with your state to modify their Tax Collection Agreement with HA to also have HA required to collect and pay your county tax as part of the "State" agreement with HA.