July 1st deadline for STR tax in Indiana

2 Replies

I just found out that by July 1st, 2019 it's mandatory to collect sales/occupancy tax for STR in Indiana.

It's unclear to me if there are two taxes - sales tax (state) and EXTRA occupancy/hotel tax for each county. 

My properties are in Marion county (Indianapolis).    I believe it's a 7% sales tax.  

There is also a Innkeeper's tax for each county.   

https://www.in.gov/dor/3469.htm

Marion county is 10%.     So is it 10+7 = 17 % total tax?   

Has anyone tried adding the tax on Airbnb?

Follow up question is who pays the tax?   Does Airbnb send the tax directly to the State/County or do we have to do that separately?

@Joe Kim . This is different in each state, but you have to pay sales and occupancy tax in every state UNLESS Airbnb/VRBO pay them for you. To complicate it further they’re likely only to pay the sales tax not the occ tax if they handle any taxes at all.

For instance, I’m in TN and currently VRBO does not take care of any taxes (although they keep adding more states where they do handle this). Airbnb pays the Sales tax for me but not the occ tax. Your Airbnb dash board will tell you how taxes work in your state.

https://www.airbnb.com/help/article/1036/how-does-occupancy-tax-collection-and-remittance-by-airbnb-work

It’s important to realize that these taxes are coming out of either you or the guests pocket no matter how they’re being remited.

NOTE: VRBO has a Tax section on the Fees page where you charge these taxes back to the guest. My Airbnb dashboard also has a section where I can add a fee or a tax although “occupancy tax” is not an option on the drop down menus so I selected “management fee” and made it 3% therefore my guests are paying all of these taxes for me. Not all Airbnb dashboards have this fee section it is a new feature.

NOTE: Occupancy tax/Lodging Tax/Hotel Tax.... you may hear each of these terms but don’t get discouraged they’re one in the same not 3 different taxes.

NOTE: Nothing in this thread has anything to do with Income Tax other than the fact that the taxes you pay to the city/state/county are a write off at the end of the year to be deducted from your 1099 income. Please contact a qualified CPA.

It's also important to note that if ANYONE is running "an Airbnb" or a STR they Must pay sales and occupancy tax every month or they're breaking the law.

Make it easy on yourself and contact mylodgetax.com They will get you all set up and handle your business license and your taxes on your behalf.

This was typed on an iPhone.

As @Lucas Carl mentioned, it's different in every state and even in every county. Some states and municipalities have made the deal with Airbnb to remit taxes and others have not. We operate in several counties and each is different. But you should remit sales tax at least annually (depending on what your tax registration says) and your room tax monthly. You will need to register for a sales and use tax number from the state (you should be able to find this online) and they will tell you how often you need to remit sales tax. The governing board in the municipality where you operate should tell you how and where to remit the room taxes if needed. 

 The booking platforms have separate line items for taxes when the guests are paying and they should remit them to you in the payout if they aren't remitting the taxes on your behalf. It can be really confusing, I know!