As of July 1, vacation rental companies like Vrbo/HomeAway and Airbnb were required to collect and remit state taxes on behalf of short-term rental owners. It’s part of the sweeping House Bill 6 tax change legislation this year.
Confusion has ensued.
“[Vrbo/HomeAway is] collecting GRT — not lodgers’ tax — and totally confusing both owners and customers,” Tourism Santa Fe CEO Randy Randall said. “They are calling GRT lodgers’ tax and not even correct in the rate, based on some sampling I have done.”
Airbnb, on the other hand, is collecting and paying the gross receipts tax or sales tax and the lodgers’ tax.
Hotel and short-term rental guests staying for 30 days or less are charged a combined 15.4375 percent tax — the 8.4375 percent gross receipts tax and the 7 percent Santa Fe lodgers’ tax.
The rub is the state collects the gross receipts tax, but the city and other municipalities collect the lodgers’ tax. HB 6 applies only to gross receipts tax, not local taxes with short-term rentals.
Before July 1, it was the vacation home owner’s responsibility to collect and pay state and local taxes — though Airbnb has been paying the Santa Fe lodgers’ tax on behalf of vacation home owners since August 2016.
Shifting the responsibility of GRT collections and payments to the online companies that list rentals has not filtered down to short-term rental owners.
“I have not heard one word from the state about this,” said Alexander E. Anthony Jr., who lists a home on Vrbo. “I don’t know if I am supposed to file a report or not. It is interesting that the state has not notified us of the procedures. I wonder when it expects to let us know the procedures?”
Short-term rental owners need to check with their providers (Vrbo/HomeAway, Airbnb) on who is submitting GRT payments, said Charlie Moore, spokesman for the New Mexico Department of Taxation & Revenue.
Moore added the department is working on written guidance about legislative changes pertaining to internet sales.
Vrbo/HomeAway, both owned by the travel technology company Expedia, confuse the matter with the identically worded notices they sent to its Santa Fe vacation home owners:
“HomeAway (and Vrbo) is obligated to collect and remit lodging taxes payable directly to the state,” the notice reads. “You’re liable to collect and remit other lodging taxes payable directly to local jurisdictions. HomeAway (and Vrbo) is not collecting these taxes.”
Vrbo/HomeAway did not respond to a request for comment from The New Mexican.
“They are collecting GRT but they are calling it lodgers’ tax,” Randall said. “We need to clarify they are collecting and remitting taxes to the state (not the city).”
Similar scenarios play out across the country as states, cities and other jurisdictions seek tax payments from short-term rentals.
“This is pretty typical,” said Rob Stephens, co-founder and general manager of Avalara MyLodgeTax, a Centennial, Colo., company that provides lodging tax automation and software for numerous short-term rental and traditional hotel companies. “It’s not necessarily straightforward when you communicate with people.“
Online companies pay state taxes but often leave local tax payments to rental home owners. That simplifies matters because states have many cities with varying tax rates and procedures.
“The state is one agency,” Stephens said. “There are many local jurisdictions. For better or worse, it’s a common scenario. Owners need to check with local agencies and the state on the taxes due.”
Airbnb and Vrbo/HomeAway make up about 80 percent of the Santa Fe’s short-term rental market, Randall said.
He said the city of Santa Fe has 1,624 vacation rentals. Santa Fe County — including the city number — has 2,141 vacation rentals, according to AirDNA, a Denver-based vacation rental data company.