We are putting a CS investment property up as an AirBNB for at least this football season and are currently going thru the CS Short term rental Permit process.

Without asking anyone to out yourselves, I'm curious from those familiar with the market about the general read on what percentage of people are actually going thru the STR permit process. We talked to several people before we decided to do the AirBNB thing and none of them mentioned the permit at all.

I came across the requirement doing due diligence and am going to go thru with it, but I'm guessing I'm going to be doing something most people are not. The $200 in fees I'm not crazy about, but can live with. It's the hotel tax submission I really don't like. It not only hurts the bottom line but adds a pain in the rear factor to stay on top of.

I live up here and had never heard of such. I'm thinking the manpower to enforce this would be significant

Well, that shows what I know. My HOA solved this problem for me. It's against our covenants to list short term rentals.

Are you responsible for the hotel tax or is AirBNB responsible for it? I ask because a few years back Wayfair v either North or South Dakota changed things dramatically so that online platforms are expected to handle sales taxes for their merchants if that platform exceeds a minimum number of transactions in that state. This has impacted all online retailers and many other industries though I did have an online ticket seller tell me they do handle them so I'm not sure how broad the ruling actually is. Just curious.

There might still be ways around that. I've heard it mentioned on the Bigger Pockets podcast something about giving the person renting it out a partial ownership.

LOYAL AG said:

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Are you responsible for the hotel tax or is AirBNB responsible for it? I ask because a few years back Wayfair v either North or South Dakota changed things dramatically so that online platforms are expected to handle sales taxes for their merchants if that platform exceeds a minimum number of transactions in that state. This has impacted all online retailers and many other industries though I did have an online ticket seller tell me they do handle them so I'm not sure how broad the ruling actually is. Just curious.

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I know on airbnb listing in Texas the tax is shown on the breakdown when you lay but not sure of they handle the payment or the homeowner does. I will reach out to some of my customers who have them and see what they say.

JP76 said:

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LOYAL AG said:

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Are you responsible for the hotel tax or is AirBNB responsible for it? I ask because a few years back Wayfair v either North or South Dakota changed things dramatically so that online platforms are expected to handle sales taxes for their merchants if that platform exceeds a minimum number of transactions in that state. This has impacted all online retailers and many other industries though I did have an online ticket seller tell me they do handle them so I'm not sure how broad the ruling actually is. Just curious.

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I know on airbnb listing in Texas the tax is shown on the breakdown when you lay but not sure of they handle the payment or the homeowner does. I will reach out to some of my customers who have them and see what they say.

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Please do as I'm curious. I confronted the ticket sales company I referenced and they said they polled their clients and the clients didn't want them to handle it so they chose not. I just replied that I wasn't sure that's how the courts would want this handled and they might should consult counsel and left it alone. They aren't a client so it's not my problem but I definitely want to know how this goes across different segments of the online economy.

Thanks!

I did the Citizens University class and in that they mentioned they'd be cracking down on AirBNB.....they want the taxes.

For my VRBO they pay the state tax and forward to me the county and city for me to pay.

I would say, regardless if you bend a knee to the city or not on this, to try and keep your photos generic and interior only, if possible. Don't give away any identifiable clues as to which house it is, if you can help it. It's been years since we've done it, but in those days they'd show a generic map with your general location and not the exact address to people until they went through with it.

KenJohse said:

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For my VRBO they pay the state tax and forward to me the county and city for me to pay.

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Ok, that's good to know. Seems messy but at least it's some clarity. I think that fits what I would expect based on my understanding of the Wayfair case. Seems annoying to be honest but maybe services like Avalara aren't yet capable of managing the various local taxes for VRBO like they are for state taxes. Thanks!

techno-ag said:

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I would say, regardless if you bend a knee to the city or not on this, to try and keep your photos generic and interior only, if possible. Don't give away any identifiable clues as to which house it is, if you can help it. It's been years since we've done it, but in those days they'd show a generic map with your general location and not the exact address to people until they went through with it.

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Ok let's be crystal clear here. Collecting and paying local hotel occupancy taxes is a state law.

https://comptroller.texas.gov/taxes/hotel/

Quote:

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HOTEL OCCUPANCY TAX

Who is responsible for this tax?

Hotel owners, operators or managers must collect state hotel occupancy tax from their guests who rent a room or space in a hotel costing $15 or more each day. The tax applies not only to hotels and motels, but also to bed and breakfasts, condominiums, apartments and houses. Local hotel taxes apply to sleeping rooms costing $2 or more each day.

With the numerous sporting and entertainment events around the state, many homeowners rent their homes or rooms in their house to people attending these events. Persons leasing their houses must collect hotel occupancy tax from their customers in the same way a hotel or motel collects the tax from its guests. Property management companies, online travel companies and other third-party rental companies may also be responsible for collecting the tax.

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I'm by no means a rules follower in general but let's be honest here. If you don't collect and remit the proper taxes you are violating state law.

KenJohse said:

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For my VRBO they pay the state tax and forward to me the county and city for me to pay.

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After I hit post on that and my post explaining state law I realized what is probably the most important point here. When you use AirBNB to rent your home the site is collecting and transferring to you the local taxes. If you don't remit those to the city you're keeping city money. That's far riskier than simply not registering and reporting because if they figure it out they'll audit and you'll get hit with a bill for the unpaid taxes plus penalties and interest plus future audits or efforts to close you down. Not sure that's really worth it.

Where did techno say he owns a hotel?

maroon barchetta said:

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Where did techno say he owns a hotel?

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He didn't. Where did I say the tax only applies to hotels? It doesn't. I posted state law which clearly says it applies to apartments, condos and houses.

tl;dr

maroon barchetta said:

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tl;dr

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Well at least we've identified the problem. lol