Monday, July 25, 2016

Zen and lodging taxes


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.