STR Life- Remitting and paying Taxes

Short-Term & Vacation Rental Discussions
1yFollow

STR Life- Remitting and paying Taxes

Paul Stewart
Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes

STR Life- Remitting Tax

I got a good question for the BP fam. If you are a STR operator how do you deal with remitting and paying tax? Now, if you do not use a PMS and only have a few properties or only operate on Airbnb that's a non-issue. For those of us that operate many properties or use a PMS where you are the merchant of sale for VRBO bookings and any direct booking I'm curious how everyone does it? I am guessing most are paying those remitted tax manually. I am wondering if there is an easier option or app that literally will remit and pay said takes for you. I feel like in today's day in age there are so many tools for STR operations and I cannot believe there is no integration for a merchant of sale transaction or some kind of financial app/ software that can take the remitted taxes and pay them to the government automatically. Wondering if anyone knows a software that does that or is our only course manually pay remitted taxes…

0Reply
33 views

Most Popular Reply

Lauren Kormylo
Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes
1y

I don't use it because I only have one property, but there is Avalara for that.  https://www.avalara.com/mylodgetax/en/index.html

4Reply
See this reply in the discussion

11 Replies

Jump to latestLatest
  • Lauren Kormylo
    Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes
    1y

    I don't use it because I only have one property, but there is Avalara for that.  https://www.avalara.com/mylodgetax/en/index.html

    4Reply
  • Trent Reeve
    Atlanta · Member since 2022 · 706 posts · 634 votes
    1y

    well, a company would have to 50 states and build in integration functionality for 50 different systems. Thats a lot of work that a company would have to do and they would want their money back on the development costs. You definitely wont get an app like that for free, so how much would you be willing to pay to a company to submit it for you, vs spending 10 minutes once a month to submit taxes? 

    I do get that if you have say 50 properties, it is taking more than 10 minutes to do. But if you have that many, seems like you would have an accountant on hand to handle that. or maybe not. I only have 4 properties so I cant speak on that

    1Reply
  • Kate Stoermer
    Real Estate Consultant · Ann Arbor, MI · Member since 2023 · 85 posts · 93 votes
    1y

    Hopped in to say Avalara as well.  I do it manually (and keep in mind, it also depends on the state and location - VRBO does for some and not for others, Airbnb does for some and not for others) I know many folks happy with Avalara though. 

    Kate

    1Reply
  • Paul Stewart
    OP
    Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes
    1y
    Quote from @Kate Stoermer:

    Hopped in to say Avalara as well.  I do it manually (and keep in mind, it also depends on the state and location - VRBO does for some and not for others, Airbnb does for some and not for others) I know many folks happy with Avalara though. 

    Kate


     I see Avalara but from looking at their site it is not clear if they are actually making the payments or are they just helping you figure out the amounts to remit? I did just reach out to them to ask specifically. 

    0Reply
  • Paul Stewart
    OP
    Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes
    1y
    Quote from @Trent Reeve:

    well, a company would have to 50 states and build in integration functionality for 50 different systems. Thats a lot of work that a company would have to do and they would want their money back on the development costs. You definitely wont get an app like that for free, so how much would you be willing to pay to a company to submit it for you, vs spending 10 minutes once a month to submit taxes? 

    I do get that if you have say 50 properties, it is taking more than 10 minutes to do. But if you have that many, seems like you would have an accountant on hand to handle that. or maybe not. I only have 4 properties so I cant speak on that


     Oh absolutely it would not be free just as most integrations in this business are not free. How much I would be willing to spend? I don't know exactly but some kind of % would be fine. For example Hospitable has a option for this through there direct bookings payout sections but it is only for specific states. The fee for this service is basically passed down to the guest one way or another. I am just surprised it seems Hospitable is the only PMS that has dived into taking on this specific situation. We manage between 80 and 100 listings it varies winter to summer but the processing of manually Remitting and paying out the property taxes takes much longer than 10 min. Though lets say 10 minutes times 100 properties is about 17hrs. I'd say each property on average has at least 2 bookings a week ( more during the on season) so that's about 34 hours a week average. Not the easiest or streamlined system. Even if it was 8 hours a week that is pretty crazy. We have AI that can answer specific questions why not a easy integration to remit and pay taxes directly? Just thinking out loud here. 

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    1y

    The only taxes I remit directly now are the tiny town tax they implemented of 1%.

    I just take my net income spreadsheet and calculate the 1% and give them a check.

    0Reply
  • Lauren Kormylo
    Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes
    1y

    Avalara does remit it for you.  Here's their page called My Lodge Tax, for STRs. https://www.avalara.com/mylodgetax/en/index.html

    Process returns, Save time and hassle.

    Automates lodging tax returns based on your monthly transaction data

    Prepares, files, and remits lodging tax based on jurisdiction deadlines — for one location or thousands

    Allows quick access to your lodging and tax filing payment history

    0Reply
  • Account Closed
    Investor · FL · Member since 2016 · 332 posts · 388 votes
    1y

    I have 9 properties in 2 states and 3 different counties. I do it myself and takes 20 to 30 minutes a month (did it yesterday for Dec), with about 7 of those minutes for 1 property in Blount County, TN which requires the form to be manually filled out, write a check, address an envelope, scan doc and check for my records and walk it to my mailbox.

    My understanding of Avalara is I still need to input the info so it would take 10-15 minutes to do. I have made an instruction sheet with an example for each taxing authority I remit to. It streamlined it for me. If anyone files for Florida it is 10 times more confusing than Tennessee.  The cheat sheet/example greatly reduced time. Personally, remitting myself makes sure I dive deep on numbers. Since Airbnb remits at the state level when I see high numbers (or low) of what I am remitting for other OTAs/direct I then drill down to make sure listings are optimized on all channels. For example, in Dec I had one property 100% direct/VRBO which historically 40% Airbnb. Today I will look to make sure that property is optimized on Airbnb.  The total cost for this monthly for me is $1.00 fee for online payment for Sevier County, TN and the .73 cent stamp for Blount County, TN. Now 3 of the 5 taxing authorities give a credit for doing them on time which can be as high as $150 savings for me each month and I am not sure I would get that using Avalara. I do use Ownerrez as a PMS and they have a report that automatically gives me the numbers needed to do it myself and it takes just a few clicks.

    1Reply
  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    1y
    Quote from @Kate Stoermer:

    Hopped in to say Avalara as well.  I do it manually (and keep in mind, it also depends on the state and location - VRBO does for some and not for others, Airbnb does for some and not for others) I know many folks happy with Avalara though. 

    Kate

    I also know many operators that have saved a ton of time using Avalara to pay taxes on multiple properties. We don't use the platform but from what I've heard, it's a great option!

    [email protected]330-557-3021
    1Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    1y

    We are (mostly) in FL with 62 active in FL. 5 Counties + State for FL and one in NJ.  Our PMS tracks all the incoming money in instances where we collect and must remit.  We print the reports and remit appropriately, taking 30-45 mins or so per month.

    Separate note - Are you in ACNJ?  I am originally from there and manage on in Ventnor and have had some issues getting a straight answer on what I should even be charging for tourist tax.  Let me know if you can be of any assistance.  Thanks!

    [email protected]813-563-0877
    Vacation Rentals of Florida53 Reviews
    WebsiteView Page
    1Reply
  • Paul Stewart
    OP
    Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes
    1y

    Thanks Andrew 

    Yes we are in ACNJ most of our properties are in AC but do have a handful in Ventnor and other shore towns. I'd have to ask my wife who handles the accounting etc about the fee question. 

    30 to 45min a month for 62 properties Not bad. I guess they are the same Taxes so it makes it easier. With different municipalities I am expecting this to be a bit more lengthy for us. 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free