VI .I. Answer Desk: Is USVI Collecting Tax on Villas and AirBnB Rentals?

http://stthomassource.com/content/news/local-news/2017/01/03/vi-answer-desk-usvi-collecting-tax-villas-and-airbnb-rentals

Maybe time to pay your share, if you've not been doing so.

your share of corruption and waste?

It's like everything else in the VI...catch me if you can!

AirBNB doesn't even issue 1099's until a host has earned over $20,000 or had 200+ rentals in any given year.

The GVI has no way of knowing how much you've really earned so even if a host goes through the bother of getting a business license, etc., they can still vastly under-report earned income to reduce the tax burden.

But, its a double edged sword for the GVI. If I have to report my income, I'll most certainly be deducting my expenses. With an AirBNB type business, I can potentially include many home ownership related expenses (or a percentage thereof) as business expenses that I wouldn't have been able to before.

So what's to gain for the GVI other than a large manpower expense to collect what amounts to peanuts?

"So what's to gain for the GVI other than a large manpower expense to collect what amounts to peanuts?"

More jobs for friends and family...Now that's funny i don't care who you are.

I live and work here in the USVI and also own a condo that I vacation rent. I have a business license for my business, my wife has a business license for her business, and we have a business license for our condo rental business. For the condo rental, I charge Hotel Tax and pay it monthly. I also file a Gross Receipts form annually, which is required to renew my license, and complete a Schedule C form for the rental business when filing my income tax. And so, perhaps selfishly, I resent others who make no effort to follow these rules, regardless of how aggravating those rules are. When someone rents their condo on VRBO and does not charge Hotel Tax, that puts me at a disadvantage price wise. And when they do charge Hotel Tax but somehow never get around to actually paying it, I resent that as well, particularly when I am riding down one of our pathetic roads that we do not have money to fix. And when I have to jump through hoops to renew my business license and arrange for a Fire Department inspection of my condo just to make sure I have a smoke detector in the bedroom and a fire extinguisher near the kitchen, I resent it when others imply I am a chump for trying to do the right thing, even if I do feel like a chump.

So do I think if our VIBIR was able to collect a few million more bucks a year in Hotel Tax that would make a big difference? No, but it might make a little difference. Plus, if others found the process not worth their time and decided to not rent out their home or condo, that would lessen the competition as well. I guess the main point of my rant is that I believe we would all be better off if everyone just tried to do the right thing. Obviously, I can't control what others do but fortunately I do have pretty good control over what I choose to do, as does everyone else.

Take a look at the VRBO and AirBnB web sites--hundreds of listings and I would guess 90% don't pay the hotel tax.

Perhaps if these taxes were collected we might get be able to get our refunds because the Gov't would have the money.

Perhaps if these taxes were collected we might get be able to get our refunds because the Gov't would have the money.

Do you honestly think that's the case?

Or would they just buy more up-armored SUV's and hotel stays in china?

Come on... when has that ever been the case?

"To legally rent a vacation room, those involved must first get the proper business license, Licensing and Consumer Affairs Commissioner Devin Carrington said in a statement in 2015.

And owners must pay hotel occupancy tax, income tax and gross receipts tax as required by law. Hotels, villas, timeshare owners and anyone else renting any lodging for a period of less than 90 days, must pay 12.5 percent of the price of the room rental."

You expect people renting out a room in their own house to make a bit of supplemental income to pay taxes on it? On an island where the government itself doesn't even pay its own bills? Riiiiight. Good luck with that. LOL

No, not people renting out a room, however, if they are renting and advertising their entire home as a vacation rental then yes, I do expect them to.

Most homes are built here with lower level apartment. One would assume that most owners would rent that lower level suite to defray the costs of ownership. Imposed taxes of 12,5% hotel tax on top of 5% gross receipts tax plus fed income tax is crazy unless one can pass the costs to the consumer.

Factoring all this taxes and regulations, inspections, liability it is not worth the effort to profit equivalent of lunch money at the end of the month.

When the government insist to be you 50-50% partner in your profits without contributing anything in return the taxpayers revolt or cheat. Morality aside, its pain nuts.

To add to this: How many people who rent cars are paying taxes?

P.S. No one likes paying taxes, but you hate it more if you are and your neighbor isn't...

The bottom line is that people who do not pay their fair share are dishonest. Wrong is wrong. Period.

I've seen several ads on Facebook lately placed by private individuals renting cars. There are now AirBNB type services that facilitate this. Are they paying all the taxes legitimate car rental companies are paying? Highly doubtful.

Does that make it right?

I suspect most partial home rentals here, such as renting out the downstairs apartment of your home while you live upstairs, are long term rentals and not subject to the Hotel Tax. But certainly those people should still be reporting the income and paying taxes on any profit after expenses. The bigger issue to me are unoccupied homes and condos that are available as vacation rentals year around except when the owners are here on vacation. Properties that are managed and rented out on behalf of the owners by at least some of the real estate companies here already pay Hotel Tax, as the real estate company pays it out of the rental proceeds on their behalf. I don't know if all do it but I do know some do. However, most of those same home owners do not have a business license and don't pay taxes on the money earned here to the VI government either.

I report my long term rental income and my accountant takes all the tax deductions allowed for maintenance, cost of doing business, etc.
I have to adhere to a code of professional ethics standards in my business life. I do so in my private life as well.

If someone is dishonest in one area of their life, they'll find it easier to be dishonest in other areas. I find it easier just to do the right thing, to the best of my ability, the first time out.

The Hotel Tax is required on any renal less than 90 days; it is paid by the guest as part of the rental rate--it is not paid by the owner. I would imaging many are collecting this tax but not paying it.

The Hotel Tax is required on any renal less than 90 days; it is paid by the guest as part of the rental rate--it is not paid by the owner. I would imaging many are collecting this tax but not paying it.

I think you're wrong. I believe that most AirBNB operators neither collect nor remit the Hotel Tax.

The only way that will change is if AirBNB is somehow compelled to collect it from the guest directly when the payment is made and remit it directly to the government.

That is the only solution and may well come to pass one day.

If they are renting for less than 90 days the Hotel Tax is supposed to be charged--and paid

Yes...and we're supposed to be coming to a full stop at Stop signs and not using our cell phones when we drive. Yet, few comply with those laws in the VI.

Likewise, most people won't pay taxes unless they're forced to through enforcement or fear of penalty.

Neither of those conditions exist for short term rental operators in the VI..

You are correct vicanuck and the IRB is to Fuc**ng lazy to go after all them.
The employees get their paycheck and benefits so why should they exert themselves.
I must say, I expected more of Marvin Pickering but apparently I was wrong.

Per the document below, if you long-term rent your property you also may be required to have a business license in the VI - particularly if you don't reside in the residential unit or have five or more units on your property.

This is from 2012 though - has this changed?

https://secure.dlca.vi.gov/license/Asps/NewsSurvey/RenderDoc.aspx?id=%2099&ftype=PDF#toolbar=1&navpanes=1&scrollbar=0

You are correct vicanuck and the IRB is to Fuc**ng lazy to go after all them.
The employees get their paycheck and benefits so why should they exert themselves.
I must say, I expected more of Marvin Pickering but apparently I was wrong.

You have to choose your battles. Collecting a few bucks from AirBNB operators probably isn't the biggest fish he can fry.

Per the document below, if you long-term rent your property you also may be required to have a business license in the VI - particularly if you don't reside in the residential unit or have five or more units on your property.

Completely unenforceable. Why do they bother with these stupid edicts from DCLA.

I own a home in Illinois that I have never lived in and have rented out for years.

I've never once paid a dime in taxes on the income.

Never will either.

Per the document below, if you long-term rent your property you also may be required to have a business license in the VI - particularly if you don't reside in the residential unit or have five or more units on your property.

Completely unenforceable. Why do they bother with these stupid edicts from DCLA.

I own a home in Illinois that I have never lived in and have rented out for years.

I've never once paid a dime in taxes on the income.

Never will either.

I was pointing this out to make sure Alana knows she needs a VI business license to rent out her house after she moves to FL. LMAO