27 Replies Latest reply: Nov 22, 2019 7:14 PM by hekkl5 RSS

    More hidden fees from VRBO

    wkm2a Contributor

      Just discovered this while doing my quarterly taxes...VRBO is charging us 3% on the taxes that they are withholding on "our behalf".  Does this seem wrong to anyone else?

        • Re: More hidden fees from VRBO
          crcasablanca Contributor

          I think the 3% is the credit card processing fee.

          Any credit card processor charges fees on the amount going through their system.  It does not matter that it is taxes or anything else.

            • Re: More hidden fees from VRBO
              wkm2a Contributor

              Yes I understand this is a CC processing fee.  However we are being charged 3% on money that we are not collecting.  It is equivalent to them charging us 3% on the service fee in my opinion.

               

              If we were collecting and remitting our own taxes I would understand...but this is not the case.

                • Re: More hidden fees from VRBO
                  ohst8er Premier Contributor

                  I agree with you, I don't think we should be paying a cc processing fee on money we don't ever see.  Seems to me if the 3rd party processor is charging 3% they should be charging the entity that is holding the money (VRBO) not us.  That being said, VRBO would still figure out a way to pass it on to US, and, seems as though they didn't have to think to hard to figure out how to do so..... 

              • Re: More hidden fees from VRBO
                3seasbeach Contributor

                wkm2a As crcasablanca stated above, the credit card processing fee is charged on the entire payment from the traveler.  This is not a hidden fee that we didn't know about.  It has been this way since I have had my listings on VRBO.  The information about this can be found on the Support Help portal here...

                https://help.vrbo.com/articles/What-are-the-credit-card-transaction-fees-for-HomeAway-Payments

                • Re: More hidden fees from VRBO
                  feibus Senior Contributor

                  If you were to collect/remit the taxes, you'd pay this CC processing fee.  It's a wash overall, nothing changed except you don't have to collect/remit the tax money.

                    • Re: More hidden fees from VRBO
                      wkm2a Contributor

                      If I were collecting and remitting the taxes I would be fine with paying this fee...but now I am not doing either of these things and I am never touching this money.  I should not be paying a fee on money that I am never touching.

                      • Re: More hidden fees from VRBO
                        georgygirl1955 Senior Contributor

                        I would also get the 2% discount from our state for timely processing, plus the rewards points on my credit card for using it to pay the taxes and that would offset the 3% if I were doing it myself.

                        HA should be paying the 3%, instead of the owner, since the money no longer passes to the owner.

                          • Re: More hidden fees from VRBO
                            twobitrentals CommunityAmbassador

                            This was an excellent point!!! I also get a discount for early payment. I would suspect that all the platforms that collect and remit also get that same discount!!!

                             

                            EXCELLENT POINT! In this scenario owners should NOT be charged for the CC fee

                             

                            Edited to add:

                             

                            After thinking about this for a minute or two and just finishing up my sales tax for the year and it was a pain because of the way that Vrbo splits it all out. As in they show the rent, then any extra people, then the pet fee, then the cleaning fee and since I only file once a year (per my State requirements) I had to spend time in a spread sheet making sure that all their separated sales tax matched with my final number.

                             

                            So, with that in mind, I wish they would take over my state like ABB did and I don’t have to think about sales tax anymore. LOL!!!

                             

                            For me less concern with being audited for a mistake or oversight by the Treasury department of my VR is HUGE!

                             

                            I

                        • Re: More hidden fees from VRBO
                          hunge1998 New Member

                          it is the credit card processing fee, which they take out of the tax portion regardless of whether they are collecting/remitting the taxes to your state or you are. What does seem totally unfair is that if vrbo is now collecting your tax, as some states mandate, you are paying a 3% credit card processing fee on the fees vrbo is charging the renter to book using their platform (monies that you’ll never see). I‘ve pursued this and have been told this is legal and nothing can be done. It’s not a large sum of money for the individual but I’m sure it’s lucrative for vrbo! Very very irritating to say the least.

                          • Re: More hidden fees from VRBO
                            ha-moderator-macy HomeAway Employee

                            When credit card processing fees are applied, they are applied to the total cost. The cost does not get separated into rent and then taxes. It is seen by any credit card processor as one total, therefore the 3% is charged on the total amount. Every business will pay processing fees on total amount, including taxes. When you go to your local convenience store and use a credit card, the store has to pay the processing fee on the total transaction, not just the part for the goods. These processing fees are usually tax deductible. We would recommend speaking to a tax expert to learn more.

                              • Re: More hidden fees from VRBO
                                ohst8er Premier Contributor

                                ha-moderator-macy wrote:

                                 

                                When credit card processing fees are applied, they are applied to the total cost. The cost does not get separated into rent and then taxes. It is seen by any credit card processor as one total, therefore the 3% is charged on the total amount. Every business will pay processing fees on total amount, including taxes. When you go to your local convenience store and use a credit card, the store has to pay the processing fee on the total transaction, not just the part for the goods. These processing fees are usually tax deductible. We would recommend speaking to a tax expert to learn more.

                                "Every business will pay processing fees on total amount... When you go to your local convenience store and use a credit card, the STORE has to pay the processing fee on the total transaction...."  (emphasis mine.) 

                                 

                                So, we are the "store?"  

                                  • Re: More hidden fees from VRBO
                                    ha-moderator-macy HomeAway Employee

                                    ohst8er, Yes. You are the "store." Credit card fees are classified by the credit card companies as merchant fees and not consumer fees. You are the merchant as you are providing the service to the travelers. The traveler would be the consumer. In some states, it is illegal for a merchant to add additional costs or a surcharge to cover these fees. We would recommend you check what the laws in your state are.

                                      • Re: More hidden fees from VRBO
                                        wildiris Active Contributor

                                        ha-moderator-macy - I understand that the owner is the merchant for the rent, fees that the owner charges (such as cleaning) and sales taxes and the  owner therefore is charged the credit card fee on all of those items.  Who is the merchant for the traveler service fee?  Isn't it HomeAway?  Who pays the credit card fee on the traveler service fee?

                                        • Re: More hidden fees from VRBO
                                          koko Active Contributor

                                          To be sure I understand - if the VR owner is the store then the owner ought to process the Credit Cards and therefore have a tax deduction for processing fees.

                                          If there is a "Merchant of record" put in between the processor and the store the tax code might look differently and furthermore does not recognize the "store's" ability - albeit in some states only - to charge the processing fee to the guest. The processing fee would also be less in almost 100% of the cases and the store could see the money within hours of the charge in the store's account . Do I have that right?

                                          Aaand if the owner is the store than the owner could refuse service to anyone or not and would not have a middleman - not on the ground - determine if a property is unfit for the guest and refund based on that.

                                          These are just some things perking in the pool of thoughts when thinking about a store's ability to make the decisions for the underlying business.

                                          • Re: More hidden fees from VRBO
                                            feibus Senior Contributor

                                            Speaking (Writing?) as someone who does this for a living, we're sooooo not the store.  We're the product.  Or in terms of services, we're the subcontractors your company is the primary contractor.

                                             

                                            In the parlance of my state's tax laws, HA is the "booking agent" and is responsible for all sales taxes.

                                             

                                            What HA chooses to pay us as the subcontractor/product is a business decision they make based the terms of service which changes without warning.

                                              • Re: More hidden fees from VRBO
                                                hekkl5 Contributor

                                                    HomeAway is the contractor. They collect the sales tax as the booking agent and I'm sure they do not put it on a credit card.

                                                Puerto Rico made us all pay them hundreds of dollars to have a license as a hotelier and make us check in every month to make sure we don't owe them more money, What about HA or VRBO trying to do away with this requirement?  They (PR) recently sent me a bill for $250 plus interest for forgetting to file a $0 on their website.

                                                    I really want to continue our rental for the revenue.It provides for our small island, Vieques but the new fees from VRBO/HA and the fines/fees from Puerto Rico make it almost better to leave our house empty until we retire in a year.

                                                Visitors rent cars, buy groceries, book tours, and go out to eat. But if it's too hard and not even cost effective, we will shut our house down, and eliminate thousands of dollars from the economy monthly.

                                                   Please let me know what can help with our taxes.

                                        • Re: More hidden fees from VRBO
                                          lovelandlakefront New Member

                                          VRBO/Homeaway is collecting sales and lodging tax for my two Colorado vacation rental properties. Besides the fact that they are collecting the wrong amount for both of my properties, which is a problem I am addressing separately,  they now also collect the 3.33% service fee discount paid by the State of Colorado when the sales tax is paid on time.  Therefore, for every $100 sales tax paid from my rental activities, on my behalf by VRBO, $6.33 is refunded back to VRBO, $3.00 by me in credit card fees and $3.33 by the State of Colorado.  My understanding is that the State of Colorado recognizes that many vendors need to pay credit card processing fees to collect the sales tax to be paid back to Colorado and kindly refund 3.33% calling it a "service fee" (discount).    Now, I no longer gain this benefit,  but VRBO does.  Therefore:   YES!!   I consider this another hidden fee collected by VRBO.

                                          • Re: More hidden fees from VRBO
                                            puttermac10 Contributor

                                            Years ago we were able to add a fee and a percent say that would be helpful for adding a percent per night as it is hard to do a flat fee when local taxes or community taxes are based off of the number of nights.  We also need to be able to control the name of this fee as community tax does not fit in any of the categories currently there. This would be helpful things for us to have.

                                            • Re: More hidden fees from VRBO
                                              hekkl5 Contributor

                                              So the switchover from Yapstone is confusing enough. I've not had any deposits from Anyone since 08/08/19.

                                              I also run a business (a pharmacy) and I don't really have the time to dedicate to following every payment. I've always trusted HA but now after a little investigation, I'm seeing that HA is making 17.652%  on the money that I /They collect and hold.   Minus  Room tax of about 8%  That is basically 10% WHY?

                                              How do they get to hold our money and take 10%?

                                              Where and when will I get any money? My entire Winter is booked, but I've gotten no money since $1421.00 on 08/08/2019. I have to replace a $1400 refrigerator . Plus pay property crew $700 for no rentals in  Sept./October.

                                                • Re: More hidden fees from VRBO
                                                  feibus Senior Contributor

                                                  I'm seeing that HA is making 17.652%  on the money that I /They collect and hold.

                                                  gonna have to show your work to get anyone to buy that statement.


                                                    • Re: More hidden fees from VRBO
                                                      hekkl5 Contributor

                                                      Overall HA is taking 4% of our totals. When they hold our money, that is where the real money is made, like banking and insurance. My math was faulty. Apologies.

                                                      Money is starting to come in now and I am appreciative.

                                                      HA does charge their percentage on taxes collected and the refundable deposit.

                                                  • Re: More hidden fees from VRBO
                                                    shawn9231 New Member

                                                    Property Location: Winter Park, Colorado

                                                    Before we have the option to put the total tax we need to get from the guest but now since Oct 1st VRBO started to collect & remit the State & Grand County Taxes and advise us to separately request the local taxes we need to through "Request Payment". Problem is they also charged it with 5% Commission & 3%Transaction Fee, which supposedly NOT coz the requested local tax amount is the exact calculation and will be remited.

                                                     

                                                    What do we need to do so that the additional local tax will not be charged  by VRBO with 5% Commission & 3%Transaction Fee?

                                                      • Re: More hidden fees from VRBO
                                                        wildiris Active Contributor

                                                        shawn9231 wrote:

                                                         

                                                        What do we need to do so that the additional local tax will not be charged  by VRBO with 5% Commission & 3%Transaction Fee?

                                                        The short and unhappy response is there's nothing you can do other than create your own website, advertise on other venues and have guests book directly with you.

                                                      • Re: More hidden fees from VRBO
                                                        wkm2a Contributor

                                                        They have now started charging us 3% on the tax they collect for their own traveler service fee....WTF!!! I'm sorry, not sorry, but they are either ridiculously greedy or ridiculously incompetent...probably both...

                                                         

                                                        Under "lodging taxes we remit" they add taxes from their own traveler service fee into the taxes they are remitting on our behalf.  They then charge us the 3% on the total tax amount.