4 Replies Latest reply: Sep 6, 2019 9:31 AM by margaret RSS

    SC Taxes

    myrtlebeachmeister New Member

      FIrst, why is the service fee the responsibility of the landlord and not VRBO?  I do not charge  the fee , never have the fee within my control and it seems to me that VRBO should report the fee as part of their business model.  On another note I see posts where people are stating that’s one less report they have to make.  Even if you file taxes online in SC you still have to file the ST 3T and to file that you have to know how the ST 388 and ST 389 are filled out.  You better check it because that ST 3T is required.  I plan on filing the reports anyway and fill in the amounts and report they were paid by VRBO.  Remember, it’s an income report so you only file for income before taxes.   VRBO claims they are your partner but now they are withholding your payments until after check in.  Just another way of letting unrealistic consumers gripe about nothing In the hopes of getting a discount because they complained.  The first time I do not get my payment or VRBO withholds it I will immediately  cancel all remaining VRBO/Homeaway bookings and find another way to rent them.  In fact I now have enough referrrals to move beyond the VRBO business model which now trashes the very landlords who made their business model work.

        • Re: SC Taxes
          margaret CommunityAmbassador

          You are not being charged the tax in the service fee, the guests are charged the taxes. It is my understanding that the State of S.C. is requiring that the guest pay tax on the service fee because it is a fee that is required to book in the site. You can call SCDOR to verify this information. It is my understanding that you are correct about continuing to file but you should file zero for all bookings that taxes are not being collected and remitted by you or you will owe those taxes. Any tax that you collect and remit on bookings from other sources should be filed as you have been doing all along.

           

          There are several threads about the payments here a a few of them:

          Why is VRBO delaying deposits?
          "Early" payments - way too late!

          An "Industry Standard"??

            • Re: SC Taxes
              myrtlebeachmeister New Member

              I didn’t say I was being charged the tax.  The issue is who should file that service fee as a taxable event.  If you file it then you are reporting unearned income IMHO. And you’re wrong about putting zero in the income.  The ST3T must be filled out regardless of who filed the taxes.  As far as the other forms they must reflect the exact numbers reported no matter who paid them.  You will not owe double taxes. 

                • Re: SC Taxes
                  margaret CommunityAmbassador

                  I misunderstood when you posted "FIrst, why is the service fee the responsibility of the landlord and not VRBO?"  The word responsibility is what made me think you were referring to paying the tax.  I understand what you are saying now.

                  I contacted SCDOR and what I have suggested is the information I was given by them. I was told the tax forms should still be submitted filing zero for any tax I do not collect and remit. The total amounts are entered but subtracted out to equal zero if all bookings are collected and remitted by an OTA. The agreement SCDOR has with HA/VRBO requires HA/VRBO to remit the tax as a lump sum to their (HA/VRBO) account not our accounts. I was told to continue collect and remit tax for bookings from other sources and file for that amount only or I would be responsible to remit tax on the entire amount.

              • Re: SC Taxes
                wildiris Active Contributor

                I am not quite sure what point you are making, although I agree with you about Vrbo withholding payments until after the guest checks in.  The traveler service fee is the responsibility of Vrbo and not the vacation rental  owner.  (I do short-term rentals only and never consider myself to be a "landlord.")  The traveler service fee is subject to sales tax in my state.  Vrbo is collecting the sales tax on the service fee and is remitting it to my state's department of revenue.

                 

                My rental is not in South Carolina and I can't speak about the SC filings that vacation rental owners have to make.  I'm sure that forms and policies vary from state to state.  In my state, online booking companies such as Vrbo and AirBnB are required to collect and remit the sales tax on all of the bookings made through their websites.  About half my bookings are via Vrbo.  When I file my monthly state sales tax return, I include all of my rental income from whatever booking source as "gross sales."  I don't include the traveler service fee as part of my sales because it's not.  It's Vrbo's.  The revenue from rentals that were made via Vrbo are then reported as "exempt sales" and that amount is subtracted from the gross sales.  The resulting number is the amount of "taxable sales." I only remit the sales tax to the state on the amount of taxable sales.  Vrbo is remitting the sales tax to the state on the bookings make through them.


                [I edited my post and changed "gross revenue" to "gross sales."]