@thebularfamily
Welcome to Stessa. I am not providing legal or financial advice, but here’s how I would think through it from a bookkeeping standpoint.
The key difference is whether the tax money actually passes through your bank account.
For the 7% collected and remitted by the platform, since it never hits your account, I would not treat it the same way as money you personally received and later paid out. If you want to track it in Stessa for reporting visibility, you may need to record it as part of the gross booking activity with an offsetting tax/remittance entry, depending on how detailed you want your books to be.
For the 6% collected by the platform, paid to you, and then remitted by you, I would track that as a liability-type item rather than a true expense. In plain English, that money is not really income you get to keep. You are temporarily holding it until you send it to the taxing authority.
That is where the “transfer” versus “non-transfer” distinction matters.
A transfer category is usually used when money is moving between accounts or being passed through, such as taxes collected and then remitted. It helps avoid treating the payment as a normal operating expense.
A non-transfer tax expense category is generally for taxes that are actually your cost of doing business, such as property taxes or other taxes the business owes directly. For example, if you categorize short-term occupancy taxes as a regular tax expense, that amount may show up as an expense on your cash flow report. That could make it look like you are taking a deduction for an expense you never actually incurred, especially if the platform collected and remitted the tax for you.
There are some municipalities where the owner is actually responsible for paying the occupancy tax directly to the municipality. In that situation, a short-term occupancy tax expense category may be appropriate because you are truly paying the tax yourself.
So, I would generally separate the 13% into two different treatments:
The 7% remitted directly by the platform: track separately only if you want gross revenue/tax visibility, since it never hits your bank.
The 6% received by you and later remitted: track as a pass-through tax liability/transfer, not as a regular expense.
The biggest thing is to be consistent and make sure your Stessa records match how your tax preparer wants the income and occupancy taxes reported at year-end. For short-term rentals, platform-remitted taxes can get messy quickly, so it is worth confirming the exact setup with your CPA or tax professional.
Hope that helps.
-Tom
www.realcentsorganized .com