Sevier County STR State and local taxes

[John Carbone]

I definitely need an expert opinion on this from a veteran in this market. From my understanding, the total tax paid should be 12.75 percent, and what I read from older posts was that 9.75 percent is collected, but hosts are still responsible for the county 3 percent tax (maybe this changed?). Based on what I’m looking at though from both vrbo and Air it seems like they are collecting way more than 9.75 in tax from the customer on my behalf. Also, regarding licenses, I got the business license from sevier county, are there any other licenses needed, perhaps from state level (I’m outside city limits). I also plugged in the address on avalara and it says it’s supposed to be 9.75 (seems like they omit county?)

here is an example of one on Air in sevier county outside city limits that I had:

$299x2 nights = $598

Cleaning fee = $200

Guest service fee = $112.66

Occupancy tax = $112.73

Total paid by guest: $1023.39
I collected $774.06 ($798 -$23.94 host service fee)—————————————————————VRBO example:
5 nights $1498

Cleaning fee $200

Booking amount: $1,698
Lodging taxes we (vrbo) remit: $216.50
guest service fee : $208
Total paid by guest: $2,122.50

Sevier county accomodations tax: $50.94
sevier county general sales and use:$46.70

Tennessee state gen sales and use: $118.86

Total tax paid by vrbo: $216.50

Received payout $1555.6 (I don’t have the subscription so I pay the commission)

thanks 

[Collin Hays]

John, 9.75 is TN state tax.  The additional is the county tax.  You do not need an additional license in Cocke County (although you still remit them taxes), but you do need a license in Sevier County, although they will gladly still take your taxes without it.  ;)  

You are paying taxes on the entire amount of the transaction, other than VRBO or AirBnB's service fees.  You do not pay taxes on those.  I had to fight TN in a sales tax audit last year over this issue, but they finally ruled that VRBO fees are not taxable to me - they are taxable to VRBO.  So they are going to collect this tax on the service fees from the guest through the transaction, and then remit to TN.

Hope this helps.