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1. How is transient occupancy tax filed and assessed?

Transient occupancy tax is to be collected and remitted by the entity facilitating the sale of an accommodation.  This might be the owner of the lodging facility, or it might be a third-party online intermediary.  Whoever books the stay and collects the money is responsible for collecting and remitting the tax.

The current tax rate is 8%.  Reports should be filed and tax paid by no later than the 20^th of each month to avoid the levy of penalties and interest.  When the 20^th falls on weekend or holiday, the due date is the first business day immediately following the 20^th.  If the filing is paid late, there is a penalty of 5% of the tax due with a minimum penalty of $2.00.  Interest will begin to accrue once the filing or payment is thirty days past due.  If we have not received your filing by the end of the month, a letter will go out advising you to file within seven days to avoid a statutory assessment.  Please be sure to use the correct account number when filing. If you are unsure of what that number is, please contact this office to verify.

If you are a lodging provider, and there is no rental activity in a given month, simply file a zero dollar return.  If you anticipate going months with no rental activity, you may file zero dollar returns in advance.  Those returns can be amended at a later date if necessary.

2. Can I file and pay online?

You may file and pay online by visiting the Online Business Tax Portal at www.charlottesville.gov/Online-Business-Portal.  

Review the page to get familiar with the portal. Click to see 4th item under  BUSINESS PORTAL INSTRUCTIONS  and  TRANSIENT OCCUPANCY TAX INSTALLMENT FILING  under  FILING  sections.

In order to use the portal, you must provide;  1) Business mailing Zip code,  2) Business Tax Account number,  3) Business EIN or SSN.

3. What constitutes an exempt rental? What documentation should I provide to corroborate exempt rentals?

Continuous rentals that last thirty days or longer are exempt from transient occupancy tax.  If claiming exempt rentals, we require documentation like a copy of the short term lease, or the recap spreadsheet from your online rental platform (AirBnB, VRBO, etc…).

4. But AirBnB says they are paying all of my taxes for me…

Beginning with filings for October 2022 (due November 20, 2022) - AirBnb began collecting and remitting local transient occupancy taxes (8% in Charlottesville) on behalf of their hosts.  Most other online accommodations intermediaries had already begun collecting and remitting TOT a year earlier.  All Intermediaries were already collecting the 5.3% Virginia Retail Sales Tax and will continue to do so.  

Filing by the host IS STILL REQUIRED even though there may be no tax liability.  In both the Online Business Tax Portal and the Uniform Statewide Transient Occupancy Tax Return (pdf), there is space for you to indicate the tax collected and remitted on your behalf by any online platforms.  Hosts are responsible to provide documentation verifying that the third party platform collected and remitted the tax due on their behalf.  If such documentation is not provided, the host assumes responsibility for remitting the tax.

In filing your report, remember to report gross rental receipts - not merely payout totals.  Gross receipts include all charges associated with the booking, such as cleaning fees, pet fees, etc…

5. 5. Why do I, as a homestay host, still have to file and provide documentation?

Some third party platforms are not providing localities with sufficient documentation to tie their lump-sum payments to individual transient occupancy accounts.  AirBnB, in particular, has steadfastly refused to comply with the Code of Virginia by providing gross receipts or the location addresses tied to those receipts.  In the absence of such data, there is no way for the City to determine where these payments should be applied.  By providing documentation, the City will be able to allocate tax amounts remitted on your behalf by third party intermediaries to your individual account.