5 Replies Latest reply: Oct 31, 2019 8:06 AM by casitacynthiasantafe RSS

    How much is the failure to add a local tax line costing you?

    casitacynthiasantafe Contributor

      I know from reading around here that the problem we are facing in New Mexico is also plaguing owners in other states, while VRBO/HomeAway seems to be doing right by Floridians. If VRBO/HomeAway has stopped collecting certain taxes in your state, and you are now paying those taxes out of your own pocket, please consider recording here your state, the tax period, and how much you have paid out of your own pocket due to the company's failure to provide you a way of adding those taxes to a traveller's quote.

       

      For example: in New Mexico, as of July 1, 2019, HomeAway only collects the State of New Mexico Gross Receipts Tax of 8.4375% in Santa Fe County (illegally calling it "Lodging Taxes" on the traveller's quote). The company has stopped collecting the 7% City of Santa Fe Lodger's Tax. Billing it separately to the traveller strikes me as terribly unprofessional and sketchy, and there is no way to fold the tax into my rates without also increasing the traveller's Service Fee and GRT. So...I am now paying that 7% out of my own pocket. I was fully booked for August and partially booked for the rest of 2019, but each month starting with September, I will be paying taxes myself on some post-July 1 bookings. Here are the numbers for September:

       

      Total City of Santa Fe September Lodger's Tax owed: $442

      Lodger's Tax collected by HomeAway on a pre-July 1 booking: $242.55

      Lodger's Tax I am paying out of my own pocket on post-July 1 bookings: $199.25

       

      So, that's $199.25 in September that I am losing due to the company's failure to add a simple line allowing me to collect local taxes. And it is only going to get worse.

        • Re: How much is the failure to add a local tax line costing you?
          momskico Contributor

          VRBO just began collecting and distributing tax to the state of Colorado today.  I checked and saw that they don't have our local metropolitan district tax included in the fee so every payment going to the state will be short.  Customer service said that I just need to contact each renter, let them know there is an additional fee and collect those dollars separately.  Oh sure, customers won't mind me telling them the rental will be more than what they signed up for.  We'll be paying that out of our rental earnings as well.  Which is really a double whammy because VRBO will report those dollars as income even though we are actually paying it out as tax dollars.

           

          It also messes up the payment to the state for us.  Colorado has an on line tax form, they collect for the state, county and local taxes and distribute them to the proper place.  If I put in the amount of rental income I have, it will want to automatically calculate what I owe in state and county tax which VRBO will be collecting and remitting.  I anticipate quite the headache trying to pay my quarterly taxes until they figure this out.  One would think that since they have experience with other states, VRBO should have this down to a science by now.   It shouldn't be difficult to add a local line item.  Why would state rates and county rates be doable, but not local? Even if we have to remit it separately out of dollars VRBO collects and sends us, they should be able to collect it along with everything else.  In fact, under the "taxes collected in Colorado" tab, VRBO states they are collecting local taxes, though they aren't.  They are just collecting state and county.

           

          VRBO still has instructions on how to change the tax you are collecting, but the fields they tell you to use to do so are not there any longer.  I suspect they were disabled when they became responsible for collecting in Colorado.

            • Re: How much is the failure to add a local tax line costing you?
              wkm2a Contributor

              I have 2 properties in Colorado.  On one of them the taxes were correct.  On the other one, which is in the exact same neighborhood and almost next door, the taxes were incorrect.  They were adding a 1% local tax that does not apply to my properties.  I called CS and they fixed it immediately.

               

              I would suggest calling CS and telling them which tax they are missing and they will add it for you.  Maybe this is wrong but I am assuming I do not have to pay taxes or report revenue through revenueonline anymore for CO?  Please correct me if that is wrong.

                • Re: How much is the failure to add a local tax line costing you?
                  momskico Contributor

                  I have called customer service and hit the feedback button.  I also asked to speak to a supervisor, but they wouldn't let me as they say there is nothing they can do about it and that they don't usually collect local taxes in any state (in my case it is a metropolitan district that should be getting 1%).  Before they went live to collect taxes starting October 1, I had my rate set at 5.4% which was correct.  It currently shows as collecting at 5.4%, but it shows them distributing at 4.4%.

                   

                  Ironic that they were charging you an extra 1% local tax  for a property in Colorado while insisting to me that they can't add a local tax in any state.  I have spoken with 3 different reps at 3 different times about this issue and they all say the same thing.  Just a 1% to your quote for it, that would be fine but that isn't a solution with the "book it" button activated.

                   

                  I'm concerned how revenueonline will work in this instance as I'm sure it will kick back me paying local metro district tax, but not county or state.  Ugh!

                  • Re: How much is the failure to add a local tax line costing you?
                    momskico Contributor

                    Also, you will still need to pay through revenueonline for this 3rd quarter and for any bookings you already had prior to October 1.  They said I'll have to file separately for all bookings that I already have for the winter months.  They will only collect and pay for bookings made October 1 or later.  I'll need to take a snapshot of the bookings I have now to know which I'll need to account for separate from their system over the next 2 quarters.

                • Re: How much is the failure to add a local tax line costing you?
                  casitacynthiasantafe Contributor

                  I am filing my City of Santa Fe Lodger's Tax for October, 2019, and I will be writing a check for $371.25 for my October Lodger's Tax. One of my three October bookings was direct, and I was able to charge the guest the 7% Lodger's Tax and the 8.4375% State of New Mexico Gross Receipts Tax. Two of the bookings came through VRBO after July 1, when they stopped collecting the 7% Lodger's Tax, only collecting the 8.4375% Gross Receipts Tax (which they illegally call "Lodging Taxes" on the traveller's invoice). So that means I will be paying $218 in Lodger's Tax out of my own pocket. Added to the $199.25 in Lodger's Tax that I paid out of my own pocket for September, 2019, I have now paid $417.25 in Lodging Taxes out of my pocket. All it would take is the addition of a "Local Taxes" line to allow me to collect this money from the traveller as I did before July 1, 2019. This is just going to get worse.

                   

                  This programming failure has cost me $417.25, and counting...