Sales Tax on AirBNB Invoices in Colorado
Understanding the Taxation of Additional Services
If you have an AirBNB in Colorado and add supplementary services to your invoice, you may wonder if sales tax applies to these services. For example, some AirBNB businesses charge separately for cleaning or janitorial services in addition to the daily stay rate.
Sales Tax on Gross vs. Net Amount
In Colorado, sales tax on AirBNB and VRBO rentals applies only to the net rental amount, not to supplementary services, provided these services are listed as separate line items on the invoice. Even if a cleaning fee is mandatory, its separation on the invoice means it is exempt from sales tax.
Tax Treatment of Separate Services
This exemption is based on the idea that supplementary services are considered reimbursements, and most services are not taxed in Colorado. For instance, if a print center’s charges are listed separately on a bill, they are not subject to sales tax. Similarly, additional services listed separately from the rental charge are not taxable.
Revenue Rulings and Guidance
Colorado’s guidance confirms that sales tax applies only to the rental amount and not to separately listed services. The Colorado Department of Revenue has affirmed that as long as these services are shown separately, they are not taxable, even if they are mandatory. For more details, refer to the following resources:
Practical Advice
While some states include cleaning fees in the total amount and apply sales tax to the entire bill, Colorado treats them as exempt services when listed separately. The regulation in this area can be unclear and varies by state.
Consultation Available
For assistance with Colorado tax-related issues or AirBNB tax concerns, contact George Dimov, CPA, at george@nyc-account.com. George has extensive experience with Colorado and mountain state tax matters. For further inquiries, please fill out the contact form on our website.
