Understanding tax remittance management in the US

Updated 3 weeks ago | 6 min read time

As of 13 May 2024, we’ll introduce an automated tax calculation and remittance capability for some US properties. This system will apply to reservations for properties in Maine, New Hampshire and North Dakota, where we facilitate payments through Payments by Booking.com via virtual credit card (VCC). Find more information about what this means for you below.

What’s in this article:

Introduction to tax withholding in the US

In some US jurisdictions, we’re responsible for calculating and remitting taxes. To comply with these requirements, we’ll calculate, withhold and pay these taxes to tax authorities for properties in Maine, New Hampshire and North Dakota from 13 May 2024. This new tax system will apply for reservations where we facilitate payments through Payments by Booking.com via virtual credit card (VCC). 

If you use Payments by Booking.com but don’t receive payouts via VCC, we’ll still calculate your tax rate but we won’t withhold or remit taxes on your behalf. If a guest pays directly at your property, you’re responsible for withholding and paying the taxes. This approach helps us make sure that taxes are calculated correctly for each reservation. We also work with a third-party tax provider that keeps us up-to-date on tax changes in relevant jurisdictions throughout the US.

Which partners these rules apply to

This change will affect you as of 13 May 2024 if you meet the following conditions: 

  • Your property is located in Maine, New Hampshire or North Dakota
  • Your property participates in Payments by Booking.com and is paid via VCC

If you meet all the above conditions, we’ll calculate, withhold and pay the applicable tax rate for your property. This new system doesn’t address your full tax responsibility but it does handle specific aspects of processing taxes for Payments by Booking.com reservations.

Properties located in other US states will continue to be responsible for calculating, collecting and remitting applicable taxes to the appropriate authorities. You’ll receive notification if and when we roll out this tax to properties in additional US states.

Tax remittance management and connectivity 

We have notified Connectivity providers about this change and informed them that tax information will be included in the new version of the Payments Clarity Package (PCP v2). If your provider is not familiar with this change, please ask them to review the relevant information in the Connectivity Hub in order to support you and implement the changes. 

Reviewing your tax settings

We'll automatically apply and manage tax configuration settings for your property. To check your tax settings, do the following:

  1. Sign in to the extranet
  2. Go to the Property tab and click on VAT/tax/charges

If you want to request an update in your tax settings, contact us via the extranet inbox, our Customer Service team or Partner Services, and we will review the request. In the meantime, we may need to maintain your original tax rate setup to avoid premature changes. We aim to answer any questions or requests as quickly as possible. 

We’ll provide you with the outcome of the review when it’s ready. We may also ask for additional information or documentation.

Virtual credit cards and tax remittance

If your property is located in Maine, New Hampshire or North Dakota, we’ll automatically withhold taxes for reservations paid via Payments by Booking.com from your payout. Therefore, the VCC should be charged with the net amount (excluding taxes). Find out more about virtual credit cards.

You can check more details on the Reservations page in the extranet. The VCC details will show the amount of taxes withheld and the balance to charge the VCC.

Downloading reservation details

You can download reports in the extranet to see the amount of withheld taxes. To download this report: 

  1. Sign in to the extranet and click on the Reservations page
  2. Click Download to get an Excel spreadsheet with detailed information
  3. Find the ‘Withheld taxes’ column to see the amount of taxes withheld

On the Reservations page, you can also filter to see which reservations we’ll withhold taxes on and which reservations you’re responsible for managing taxes.

Getting help

If you need clarification on what tax rules and rates apply, we recommend contacting a tax advisor for the most accurate and up-to-date information about tax regulations and laws. To get the latest information on US tax legislation, please visit your state or local government website.

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