“Be the tax, Danny.”
Lodging taxes get a bad rap.
The topic of “taxes” generally makes people squirm and conjures up ominous images of black-suited tax agents. When someone purchases a vacation rental
property, the concept of taxes is frequently far from their minds. As lodging taxes face increasing scrutiny in the
vacation rental industry, it’s easy to view this process with contempt. However, if you can put aside for a moment any negative preconceptions you may have regarding lodging taxes, you may find that there are many possible
reasons to view taxes in a more positive light – especially if your rental is
located in a popular travel destination.
“Tax on,
tax off.”
I can probably guess what you’re thinking. “Lodging taxes are a pain, pure and simple. What good are they?” Well, here are just a few ways that may help
you look at lodging taxes in a different way and how you may actually benefit
from them:
·
You don’t pay sales & lodging taxes
out of pocket:
Sales & lodging taxes are paid by your guests, not you. You’re responsible for collecting the taxes
and filing the returns, but you guests are the ones actually paying the tax.
·
Taxes help your town’s infrastructure: If your property is in a
popular tourist area, the majority of your community’s revenue likely comes
from travel and tourism-related taxes. A
good chunk of those tax dollars are commonly reinvested in improving your town’s
infrastructure to keep your community attractive and attract future visitors.
·
Taxes legitimize the vacation rental
industry:
There are some hotels that would love to see less competition in the
lodging space. Certain companies have
led a charge on banning the vacation rental industry on the grounds that owners
aren't collecting taxes from their guests. By embracing taxes, we can ensure that vacation
rentals (and their owners) continue to thrive for many, many years to come.
So you see, taxes aren’t all bad. The return filing process may be tedious, but
by collecting and remitting lodging taxes, you actually benefit in the long
run. If you accept them – no, embrace them! – you will see the benefit. But in the off chance you still don’t want
to deal with the hassle, we can help.
Namaste.