VRBO tax errors for 2025 (tax on platform fee aka Guest Service Fee)

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VRBO tax errors for 2025 (tax on platform fee aka Guest Service Fee)

Christina B.
Boulder, CO · Member since 2023 · 169 posts · 95 votes

I've been living a separate tax nightmare (another post for another time) but curious if anyone else is seeing that starting 2025, VRBO began taxing not just nightly rate total + host fees (e.g. cleaning, pet, extra guests), but their own Guest Service Fee? It's possible mine is an isolated issue and VRBO is supposedly escalating this with their Billing Department. This is on top of their amended 1099s for 2024 (amended is correct now). I did start checking 2024 to get a baseline for when this became an issue but looks like they were calculating it correctly (the taxes were applied after each item- e.g. after the nightly rate, then after the cleaning fee, etc.).

Is anyone else seeing this? (For me, it's not just one booking, it's all my 2025 VRBO bookings.)

Correct formula (I think): nightly rate total of $2500 + cleaning fee of $400 = $2900 x .102 (10.2% total taxes for my area in Colorado)

VRBO 2025 formula: nightly rate total of $2500 + cleaning fee of $400 + Guest Service Fee of $400 = $3300 x .102

FWIW, Airbnb is still using the first formula.

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

    I am getting ready to get everything sorted and out to our CPA so I will take a look and see what I see.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    1y

    I'm pretty sure mine is correct because I had downloaded the amount before VRBO sent the tax document and they were within pennies of each other.

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  • Patricia Andriolo-Bull
    Member since 2022 · 527 posts · 413 votes
    1y

    I spot checked a few of mine across my listings and they are correct (e.g. the tax collected is only for my nightly rate + my fees).  I looked at 2025 only.  That said, since this is a sales / occupancy tax, the rules may be different by state/locality/county.  It could be true that some states request that Airbnb / VRBO are paying sales tax on their portion as well?  I am in Florida.

    Also of note, I am API connected so I am seeing what I have to remit in taxes.  It is also feasible that they are also charging sales tax for their portion but since they take their guest fee, they may also be taking their sales tax.

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  • Christina B.
    OP
    Boulder, CO · Member since 2023 · 169 posts · 95 votes
    1y

    For clarification and thank you @Michael Baum, @John Underwood, and @Patricia Andriolo-Bull for your replies, this only regards 2025 bookings. (Side note: the original 1099 VRBO sent me for the 2024 tax year was incorrect and missing some December bookings but they sent me an amended 1099 which is correct.)

    This is why it's puzzling to me that their system was calculating and remitting the taxes in 2024 correctly but in 2025 is clearly adding in the guest service fee (platform fee) as part of the total which is taxed. I realize in other countries, VAT may apply to that platform fee. But it hasn't so far in the US, to my knowledge. Taxes should just be on nightly rate total + host fees (cleaning, etc.). Does anyone in any state in the US pay taxes on the platform fee?

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    • Patricia Andriolo-Bull
      Member since 2022 · 527 posts · 413 votes
      1y
      Quote from @Christina B.:

      For clarification and thank you @Michael Baum, @John Underwood, and @Patricia Andriolo-Bull for your replies, this only regards 2025 bookings. (Side note: the original 1099 VRBO sent me for the 2024 tax year was incorrect and missing some December bookings but they sent me an amended 1099 which is correct.)

      This is why it's puzzling to me that their system was calculating and remitting the taxes in 2024 correctly but in 2025 is clearly adding in the guest service fee (platform fee) as part of the total which is taxed. I realize in other countries, VAT may apply to that platform fee. But it hasn't so far in the US, to my knowledge. Taxes should just be on nightly rate total + host fees (cleaning, etc.). Does anyone in any state in the US pay taxes on the platform fee?


      These are state specific. What state are you in? 

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  • Christina B.
    OP
    Boulder, CO · Member since 2023 · 169 posts · 95 votes
    1y

    Colorado. But I'm genuinely curious. STRs in other states might actually pay tax on the OTA platform fee/guest fee? That seems wrong.

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  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    1y

    I know it is correct to charge the tourist tax on cleaning fee and other fees like pets.  At least in FL.

    [email protected]813-563-0877
    Vacation Rentals of Florida53 Reviews
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