Airbnb Taxes by State: A Complete 50-State Guide
Navigating Airbnb and short-term rental (STR) investing offers wealth creation opportunities, but involves complex tax considerations that vary by state and city. Understanding these Airbnb taxes by state is crucial for compliance and impacts your return on investment and long-term success in the STR market.
For many investors, especially those with high W-2 incomes seeking additional investment vehicles and tax advantages, the patchwork of income, occupancy, and sales taxes across jurisdictions can be overwhelming. Which taxes apply to your property? How much should you budget for tax obligations? Are there potential tax benefits?
This guide aims to demystify STR taxation across all 50 US states, providing the foundational knowledge to navigate these complexities confidently. STR Search, a leader in identifying high-ROI short-term rental properties, understands that taxes represent obligations and opportunities for savvy investors. Their data-driven approach helps investors find properties with strong financial profiles while accounting for tax implications that can significantly affect the bottom line.
Alabama Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Alabama Department of Revenue Income Tax
State Lodging/Occupancy Tax: 4% state lodging tax. Airbnb collects and remits for the state. Alabama Department of Revenue Lodging Tax
State Sales Tax: A 4% state sales tax may apply to STRs in some situations. Alabama Department of Revenue Sales Tax
Local Taxes: Counties and municipalities often impose additional lodging taxes that may not be collected by Airbnb.
Key Resource: Alabama Department of Revenue
Note: Major tourist areas like Gulf Shores and Orange Beach have additional local requirements.
Alaska Airbnb Taxes
State Income Tax: No state income tax.
State Lodging/Occupancy Tax: No statewide lodging tax. Alaska Department of Revenue
State Sales Tax: None. Alaska Department of Revenue
Local Taxes: Many municipalities impose local sales and/or bed taxes. For example, Anchorage has a 12% bed tax and Juneau has a 7% hotel tax.
Key Resource: Alaska Department of Revenue
Note: Check specific municipalities as local taxes vary widely across Alaska.
Arizona Airbnb Taxes
State Income Tax: Yes, rental income is taxable.
State Lodging/Occupancy Tax: Arizona imposes a 5.5% Transaction Privilege Tax (TPT) on short-term rentals. Airbnb collects and remits.
State Sales Tax: Covered under TPT.
Local Taxes: Counties and cities often impose additional TPT. For example, Phoenix adds a 2.3% city tax.
Key Resource: Arizona Department of Revenue
Note: Under state law A.R.S. § 42-5005, Arizona has specific STR registration requirements.
Arkansas Airbnb Taxes
State Income Tax: Yes, rental income is taxable.
State Lodging/Occupancy Tax: 1.5% state tourism tax applies to STRs. Airbnb collects and remits.
State Sales Tax: 6.5% state sales tax applies to STRs.
Local Taxes: In addition to state taxes, county and city sales taxes apply.
Key Resource: Arkansas Department of Finance and Administration
Note: Hot Springs, Eureka Springs, and other tourist destinations may have additional requirements.
California Airbnb Taxes
State Income Tax: Yes, rental income is taxable at rates up to 13.3%.
State Lodging/Occupancy Tax: No statewide occupancy tax, but Airbnb collects and remits for certain localities.
State Sales Tax: Generally not applicable to lodging (covered by TOT instead). California Department of Tax and Fee Administration
Local Taxes: Cities and counties impose Transient Occupancy Taxes (TOT) of 10-15%. For example, San Francisco and Los Angeles charge 14%, and San Diego 10.5%.
Key Resource: California Department of Tax and Fee Administration
Note: California has some of the strictest local STR regulations in the country, especially in Santa Monica, San Francisco, and Los Angeles.
Colorado Airbnb Taxes
State Income Tax: Yes, rental income is taxable.
State Lodging/Occupancy Tax: No specific state lodging tax.
State Sales Tax: A 2.9% state sales tax applies to accommodations. Airbnb collects and remits.
Local Taxes: County and city lodging taxes are common. Denver charges an additional 10.75% lodging tax.
Key Resource: Colorado Department of Revenue
Note: Mountain resort communities often have higher local tax rates.
Connecticut Airbnb Taxes
State Income Tax: Yes, rental income is taxable.
State Lodging/Occupancy Tax: 15% room occupancy tax. Airbnb collects and remits.
Sales Tax: 6.35% sales tax may apply to certain charges.
Local Taxes: No additional local occupancy taxes.
Key Resource: Connecticut Department of Revenue Services
Note: Connecticut laws address STRs through Public Act No. 19-117.
Delaware Airbnb Taxes
State Income Tax: Yes, rental income is taxable.
State Lodging/Occupancy Tax: 8% statewide accommodation tax. Airbnb collects and remits.
State Sales Tax: No state sales tax. Delaware Division of Revenue
Local Taxes: Some municipalities collect local accommodation taxes.
Key Resource: Delaware Division of Revenue
Note: Coastal communities like Rehoboth Beach have additional regulations.
Florida Airbnb Taxes
State Income Tax: No state income tax. Florida Department of Revenue
State Lodging/Occupancy Tax: No statewide lodging tax, but sales tax applies to STRs.
State Sales Tax: A 6% state sales tax applies to short-term rentals, plus a local discretionary sales surtax. Airbnb collects and remits these taxes. Florida Department of Revenue Sales & Use Tax
Local Taxes: Most counties impose a Tourist Development Tax (TDT), which can range from 2% to 6%. Hosts may be responsible for collecting and remitting TDT in counties where Airbnb does not have an agreement.
Key Resource: Florida Department of Revenue
Note: Florida's TDT system is county-specific, requiring hosts to verify their local obligations.
Georgia Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Georgia Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 4% state sales tax applies to STRs. Airbnb collects and remits. Georgia Department of Revenue Sales & Use Tax
Local Taxes: Counties and cities impose local sales taxes and hotel-motel excise taxes. Hosts are typically responsible for remitting local hotel-motel taxes.
Key Resource: Georgia Department of Revenue
Note: Atlanta has additional city-specific taxes and regulations.
Hawaii Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Hawaii Department of Taxation Income Tax
State Lodging/Occupancy Tax: A 10.25% Transient Accommodations Tax (TAT) applies to STRs.
State Sales Tax: A 4% General Excise Tax (GET) also applies to gross rental income (4.5% in some counties). Hosts must register and remit both TAT and GET.
Local Taxes: Counties may impose an additional surcharge on the TAT (e.g., 3% in Maui and Honolulu).
Key Resource: Hawaii Department of Taxation
Note: Hawaii has extremely strict STR registration and zoning laws. Failure to display a valid tax ID number on listings can result in significant penalties.
Idaho Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Idaho State Tax Commission Income Tax
State Lodging/Occupancy Tax: A 2% state lodging tax (Travel and Convention Tax) applies.
State Sales Tax: A 6% state sales tax also applies to STRs. Airbnb collects and remits both the sales tax and lodging tax.
Local Taxes: Some resort cities and auditorium districts may impose additional local sales or lodging taxes.
Key Resource: Idaho State Tax Commission
Note: The total tax rate on an STR in Idaho is a combination of state sales tax, state lodging tax, and any applicable local taxes.
Illinois Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Illinois Department of Revenue Income Tax
State Lodging/Occupancy Tax: A 6% state Hotel Operators' Occupation Tax applies. Airbnb collects and remits. Illinois Hotel Operators' Occupation Tax
State Sales Tax: Covered by the Hotel Operators' Occupation Tax.
Local Taxes: Many municipalities, especially Chicago, impose significant additional local hotel taxes. For example, Chicago adds multiple layers of local taxes totaling over 10%.
Key Resource: Illinois Department of Revenue
Note: Chicago has one of the highest effective tax rates on STRs in the country due to combined state and local taxes.
Indiana Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Indiana Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 7% state sales tax applies to accommodations. Airbnb collects and remits. Indiana Department of Revenue Sales Tax
Local Taxes: Most counties impose an innkeeper's tax, which varies by location. Hosts are responsible for remitting these local taxes.
Key Resource: Indiana Department of Revenue
Note: The county innkeeper's tax is a significant factor and requires separate registration and remittance by the host.
Iowa Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Iowa Department of Revenue Income Tax
State Lodging/Occupancy Tax: A 5% state Hotel and Motel Tax applies.
State Sales Tax: A 6% state sales tax also applies (plus a 1% local option sales tax in most areas). Airbnb collects and remits the state sales and hotel/motel taxes.
Local Taxes: Cities and counties may impose their own hotel and motel taxes in addition to the state taxes.
Key Resource: Iowa Department of Revenue
Note: The total tax burden includes state sales tax, state hotel tax, and potentially local hotel taxes.
Kansas Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Kansas Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 6.5% state sales tax (known as a "retailers' sales tax") applies to STRs. Airbnb collects the state-administered taxes.
Local Taxes: Cities and counties impose a transient guest tax, which is not collected by Airbnb. Hosts must register locally to remit this tax.
Key Resource: Kansas Department of Revenue
Note: Host responsibility for local transient guest taxes is a key compliance point in Kansas.
Kentucky Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Kentucky Department of Revenue Income Tax
State Lodging/Occupancy Tax: A 1% state transient room tax applies.
State Sales Tax: A 6% state sales tax also applies to accommodations. Airbnb collects and remits both state-level taxes.
Local Taxes: Many cities and counties impose additional local transient room taxes. Hosts are responsible for remitting these.
Key Resource: Kentucky Department of Revenue
Note: Louisville and Lexington have their own specific local tax requirements for STRs.
Louisiana Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Louisiana Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 4.45% state sales tax applies. Airbnb collects and remits state sales tax.
Local Taxes: Parishes (counties) and cities impose their own sales and hotel/motel taxes, which can be complex. In New Orleans, hosts are responsible for remitting a complex set of local taxes.
Key Resource: Louisiana Department of Revenue
Note: The tax structure in New Orleans is particularly challenging and requires direct registration and remittance with the city.
Maine Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Maine Revenue Services Income Tax
State Lodging/Occupancy Tax: No specific lodging tax, but a higher sales tax rate applies.
State Sales Tax: A 9% sales tax applies to lodging (higher than the general sales tax). Airbnb collects and remits this tax.
Local Taxes: Generally, no additional local lodging taxes are imposed.
Key Resource: Maine Revenue Services
Note: The key tax is the 9% Meals and Lodging tax, which is higher than Maine's general sales tax rate.
Maryland Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Comptroller of Maryland Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 6% state sales and use tax applies to STRs. Airbnb collects and remits the state tax.
Local Taxes: Many counties (e.g., Montgomery, Anne Arundel, Prince George's) and Baltimore City impose a local accommodation tax that hosts must collect and remit.
Key Resource: Comptroller of Maryland
Note: Host responsibility for county-level accommodation taxes is crucial.
Massachusetts Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Massachusetts Department of Revenue Income Tax
State Lodging/Occupancy Tax: A 5.7% state room occupancy excise applies. Airbnb collects and remits.
State Sales Tax: Covered under the room occupancy excise.
Local Taxes: Cities and towns can add a local option tax (up to 6%), a community impact fee (up to 3%), and a fee for the Cape Cod and Islands Water Protection Fund. Airbnb collects most of these.
Key Resource: Massachusetts Department of Revenue
Note: Massachusetts has a multi-layered tax system for STRs that includes state, local, and special district taxes.
Michigan Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Michigan Department of Treasury Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 6% Use Tax (not Sales Tax) applies to accommodations for fewer than 30 days. Airbnb collects and remits this tax.
Local Taxes: Some local jurisdictions, like Detroit, have a Convention Facility Development Tax that applies to hotels and may apply to STRs.
Key Resource: Michigan Department of Treasury
Note: It is a 6% Use Tax, not a Sales Tax, that applies to STRs in Michigan.
Minnesota Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Minnesota Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 6.875% state sales tax applies. Airbnb collects and remits the state tax.
Local Taxes: Many cities (e.g., Minneapolis, St. Paul, Duluth) impose additional local sales taxes and lodging taxes that hosts must remit.
Key Resource: Minnesota Department of Revenue
Note: Hosts must check for and comply with local tax obligations, which are common in tourist areas.
Mississippi Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Mississippi Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 7% state sales tax applies to STRs. Airbnb collects and remits.
Local Taxes: Many cities and counties, especially along the Gulf Coast, impose additional local tourism and economic development taxes that hosts are responsible for remitting.
Key Resource: Mississippi Department of Revenue
Note: Local "bed taxes" are common and require separate filing by the host.
Missouri Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Missouri Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 4.225% state sales tax applies. Airbnb collects and remits state and some district sales taxes.
Local Taxes: County and city sales and lodging taxes are common. Hosts are often responsible for remitting local lodging taxes.
Key Resource: Missouri Department of Revenue
Note: Major cities like St. Louis and Kansas City have their own local tax requirements.
Montana Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Montana Department of Revenue Income Tax
State Lodging/Occupancy Tax: An 8% lodging facility sales and use tax applies statewide. This is comprised of a 4% lodging tax and a 4% sales tax. Airbnb collects and remits this tax.
State Sales Tax: No general state sales tax, but the lodging tax functions as one for STRs.
Local Taxes: Some designated resort areas may impose an additional local resort tax.
Key Resource: Montana Department of Revenue
Note: The primary tax is the statewide 8% lodging tax.
Nebraska Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Nebraska Department of Revenue Income Tax
State Lodging/Occupancy Tax: A 1% state lodging tax applies.
State Sales Tax: A 5.5% state sales tax also applies to accommodations. Airbnb collects and remits both state taxes.
Local Taxes: Cities can impose additional local occupation taxes on lodging, which hosts must remit.
Key Resource: Nebraska Department of Revenue
Note: Total tax includes state sales tax, state lodging tax, and any applicable city occupation taxes.
Nevada Airbnb Taxes
State Income Tax: No state income tax. Nevada Department of Taxation
State Lodging/Occupancy Tax: No statewide lodging tax; taxes are set and collected at the county level.
State Sales Tax: Not applicable to lodging.
Local Taxes: Counties impose a transient lodging tax. Rates vary significantly, from around 8% to over 13% in Clark County (Las Vegas). Airbnb collects and remits taxes in some, but not all, counties.
Key Resource: Nevada Department of Taxation
Note: Tax compliance is managed at the county level. It is essential to check rules for the specific county where the property is located (e.g., Clark County for Las Vegas, Washoe County for Reno).
New Hampshire Airbnb Taxes
State Income Tax: No tax on earned income. Rental income is not subject to state income tax.
State Lodging/Occupancy Tax: An 8.5% Meals and Rooms (Rentals) Tax applies. Airbnb collects and remits this tax.
State Sales Tax: No state sales tax.
Local Taxes: No additional local lodging taxes.
Key Resource: New Hampshire Department of Revenue Administration
Note: The 8.5% Meals and Rooms Tax is the primary tax obligation for STR hosts.
New Jersey Airbnb Taxes
State Income Tax: Yes, rental income is taxable. New Jersey Division of Taxation Income Tax
State Lodging/Occupancy Tax: A 5% State Occupancy Fee applies.
State Sales Tax: A 6.625% state sales tax also applies. Airbnb collects and remits the sales tax and state occupancy fee.
Local Taxes: Municipalities can impose an additional Municipal Occupancy Tax of up to 3%. Hosts may be responsible for remitting this.
Key Resource: New Jersey Division of Taxation
Note: The total state-level tax is over 11.625% before any local taxes.
New Mexico Airbnb Taxes
State Income Tax: Yes, rental income is taxable. New Mexico Taxation and Revenue Department Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A Gross Receipts Tax (GRT) applies instead of a traditional sales tax. The state rate is 4.875%, but the total rate varies by location due to local components.
Local Taxes: Municipalities and counties impose their own Lodgers' Taxes. Hosts are responsible for registering and remitting the combined GRT and local Lodgers' Tax.
Key Resource: New Mexico Taxation and Revenue Department
Note: The GRT system is complex, and rates change based on the property's exact location.
New York Airbnb Taxes
State Income Tax: Yes, rental income is taxable. New York State Department of Taxation and Finance Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 4% state sales tax applies.
Local Taxes: Many counties and cities impose a hotel room occupancy tax. Airbnb collects state and some local taxes, but notably not in New York City due to severe STR restrictions. Hosts in many areas must collect and remit taxes themselves.
Key Resource: New York State Department of Taxation and Finance
Note: Operating an STR and complying with tax laws in New York City is exceptionally difficult. Hosts outside NYC must verify which local taxes Airbnb collects.
North Carolina Airbnb Taxes
State Income Tax: Yes, rental income is taxable. North Carolina Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 4.75% state sales tax applies to accommodations. Airbnb collects and remits the state sales tax.
Local Taxes: Most counties and some cities levy a local occupancy tax. Hosts are responsible for collecting and remitting these local taxes.
Key Resource: North Carolina Department of Revenue
Note: Local occupancy taxes are prevalent, especially in tourist destinations like the Outer Banks and mountain regions.
North Dakota Airbnb Taxes
State Income Tax: Yes, rental income is taxable. North Dakota Office of State Tax Commissioner Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 5% state sales tax applies to lodging. Airbnb collects and remits state-administered taxes.
Local Taxes: Many cities and counties impose additional local lodging and/or sales taxes that hosts may need to remit separately.
Key Resource: North Dakota Office of State Tax Commissioner
Note: Verify local tax collection responsibilities as they vary by municipality.
Ohio Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Ohio Department of Taxation Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 5.75% state sales tax applies. Airbnb collects and remits the state sales tax.
Local Taxes: County and municipal lodging taxes are very common. Hosts are responsible for registering with local authorities and remitting these taxes.
Key Resource: Ohio Department of Taxation
Note: Local lodging tax compliance is a key responsibility for hosts in Ohio.
Oklahoma Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Oklahoma Tax Commission Income Tax
State Lodging/Occupancy Tax: A 1.25% state lodging tax applies.
State Sales Tax: A 4.5% state sales tax also applies. Airbnb collects and remits both state-level taxes.
Local Taxes: Many cities and counties impose their own local sales and lodging taxes, which Airbnb may or may not collect.
Key Resource: Oklahoma Tax Commission
Note: Verify collection agreements for local taxes, as remittance may fall to the host.
Oregon Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Oregon Department of Revenue Income Tax
State Lodging/Occupancy Tax: A 1.5% state transient lodging tax applies. Airbnb collects and remits the state tax.
State Sales Tax: No state sales tax.
Local Taxes: Many cities (like Portland) and counties (like Multnomah) impose their own significant local lodging taxes, which hosts are responsible for remitting.
Key Resource: Oregon Department of Revenue
Note: While the state tax is low, local lodging taxes can be substantial and require separate filing.
Pennsylvania Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Pennsylvania Department of Revenue Income Tax
State Lodging/Occupancy Tax: A 6% state hotel occupancy tax applies. Airbnb collects and remits this tax.
State Sales Tax: Covered by the hotel occupancy tax.
Local Taxes: Allegheny County (Pittsburgh) adds a 7% tax and Philadelphia adds an 8.5% tax. Airbnb collects these specific local taxes.
Key Resource: Pennsylvania Department of Revenue
Note: The combined state and local tax rates in Philadelphia and Pittsburgh are among the highest in the country.
Rhode Island Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Rhode Island Division of Taxation Income Tax
State Lodging/Occupancy Tax: A 1% local hotel tax is administered and collected by the state.
State Sales Tax: A 7% state sales tax also applies to STRs. Airbnb collects and remits both the sales tax and the state-administered hotel tax.
Local Taxes: The 1% local hotel tax is state-mandated, so no other local lodging taxes apply.
Key Resource: Rhode Island Division of Taxation
Note: The total tax rate on STRs is 8% (7% sales + 1% hotel), all handled at the state level.
South Carolina Airbnb Taxes
State Income Tax: Yes, rental income is taxable. South Carolina Department of Revenue Income Tax
State Lodging/Occupancy Tax: A statewide 7% Accommodations Tax applies. This consists of the 5% state sales tax plus a 2% special state accommodations tax. Airbnb collects and remits.
State Sales Tax: Included within the 7% Accommodations Tax.
Local Taxes: Cities and counties can impose additional local accommodations taxes, which hosts may need to remit.
Key Resource: South Carolina Department of Revenue
Note: Be sure to account for local accommodations taxes, especially in popular tourist areas like Charleston and Myrtle Beach.
South Dakota Airbnb Taxes
State Income Tax: No state income tax. South Dakota Department of Revenue
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 4.2% state sales tax applies to lodging.
Local Taxes: A 1.5% state tourism tax applies in addition to the sales tax. Many municipalities also impose a gross receipts tax (e.g., Deadwood, Rapid City). Airbnb collects state-administered taxes.
Key Resource: South Dakota Department of Revenue
Note: The total tax rate includes state sales tax, the tourism tax, and any applicable municipal taxes.
Tennessee Airbnb Taxes
State Income Tax: No state tax on earned income. Rental income is not subject to state income tax.
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 7% state sales tax applies to accommodations. Airbnb collects and remits the state tax.
Local Taxes: Counties and cities impose their own occupancy taxes. Hosts are responsible for remitting these local taxes.
Key Resource: Tennessee Department of Revenue
Note: Local occupancy taxes are a major factor, especially in tourist hubs like Nashville, Gatlinburg, and Sevierville.
Texas Airbnb Taxes
State Income Tax: No state income tax. Texas Comptroller of Public Accounts
State Lodging/Occupancy Tax: A 6% state hotel occupancy tax applies. Airbnb collects and remits the state tax.
State Sales Tax: Covered by the hotel occupancy tax.
Local Taxes: Cities and counties can impose additional local hotel occupancy taxes, which can be substantial (up to 11%). Hosts must verify if Airbnb collects on behalf of their locality.
Key Resource: Texas Comptroller of Public Accounts
Note: The combined state and local hotel tax rate can reach 17% in some cities like Houston.
Utah Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Utah State Tax Commission Income Tax
State Lodging/Occupancy Tax: A 0.35% state transient room tax applies.
State Sales Tax: A 4.85% state sales tax also applies, plus numerous local sales taxes. Airbnb collects and remits many of these taxes.
Local Taxes: Utah has a complex system of local taxes, including county transient room taxes, resort taxes, and more.
Key Resource: Utah State Tax Commission
Note: The layering of state, county, and city taxes makes Utah's tax structure for STRs particularly complex.
Vermont Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Vermont Department of Taxes Income Tax
State Lodging/Occupancy Tax: A 9% Meals and Rooms Tax applies. Airbnb collects and remits this tax.
State Sales Tax: A 1% local option tax may also be applied to the meals and rooms tax in some towns.
Local Taxes: Some municipalities, like Burlington, may have additional fees or taxes.
Key Resource: Vermont Department of Taxes
Note: The primary tax is the 9% Meals and Rooms Tax, which is comprehensive.
Virginia Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Virginia Department of Taxation Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A state sales tax of 5.3% (or higher in some regions) applies. Airbnb collects the state sales tax.
Local Taxes: Most cities and counties impose a local transient occupancy tax (TOT). Hosts are generally responsible for remitting the local TOT.
Key Resource: Virginia Department of Taxation
Note: Local transient occupancy tax is a key compliance responsibility for hosts in Virginia.
Washington Airbnb Taxes
State Income Tax: No state income tax on personal income, but a Business & Occupation (B&O) tax on gross receipts applies to most businesses, including STRs.
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 6.5% state retail sales tax applies. Airbnb collects and remits state and some local sales taxes.
Local Taxes: Cities and counties have local sales taxes and special hotel/motel taxes.
Key Resource: Washington State Department of Revenue
Note: The B&O tax is a significant business cost and must be filed separately by the host.
West Virginia Airbnb Taxes
State Income Tax: Yes, rental income is taxable. West Virginia State Tax Department Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax, but sales tax applies.
State Sales Tax: A 6% state sales and service tax applies to hotel/motel stays. Airbnb collects and remits the state tax.
Local Taxes: Municipalities are authorized to levy their own local hotel occupancy taxes, which hosts are responsible for remitting.
Key Resource: West Virginia State Tax Department
Note: Host responsibility for local hotel occupancy taxes is the key compliance point.
Wisconsin Airbnb Taxes
State Income Tax: Yes, rental income is taxable. Wisconsin Department of Revenue Income Tax
State Lodging/Occupancy Tax: No statewide lodging tax.
State Sales Tax: A 5% state sales tax applies. Airbnb collects and remits the state tax.
Local Taxes: Many municipalities impose a local room tax (also called a bed tax), which can be up to 8% or more. Hosts must register and remit this tax locally.
Key Resource: Wisconsin Department of Revenue
Note: Local room taxes are a significant and separate obligation for STR hosts.
Wyoming Airbnb Taxes
State Income Tax: No state income tax. Wyoming Department of Revenue
State Lodging/Occupancy Tax: No statewide lodging tax, but sales tax applies.
State Sales Tax: A 4% state sales tax applies to accommodations.
Local Taxes: Counties can impose a local lodging tax of up to 4%, plus local sales taxes. Hosts must verify which taxes Airbnb collects for their specific location.
Key Resource: Wyoming Department of Revenue
Note: Local lodging taxes are common, especially in tourist areas like Teton County (Jackson), and can significantly increase the total tax rate.
Why Understanding STR Taxes is Crucial for Investors
Taxes on your STR investment impact more than compliance. They directly influence your Net Operating Income (NOI) and overall Return on Investment (ROI). Without accurate tax projections, your financial models may be flawed, turning a profitable property into a cash flow negative investment.
Compliance with federal, state, and local tax laws isn't optional; it's mandatory. Non-compliance can lead to penalties, interest charges, and legal action. However, understanding the tax landscape isn't solely about avoiding penalties. STR investments offer significant tax advantages through deductions, depreciation, and strategies to offset other income. STR Search helps investors identify properties with strong financial profiles to maximize these tax considerations for high-income earners seeking to optimize their tax positions through real estate investments.
Common Taxes for Airbnb / STR Hosts
STR hosts often face multiple layers of taxation beyond typical homeowners. Understanding these tax categories is essential for accurate financial planning and compliance.
Federal Income Tax
Rental income from your STR is taxable at the federal level. If you're renting without substantial services, report it to the IRS on Schedule E (Supplemental Income and Loss). If you're providing significant services, report it on Schedule C (Profit or Loss From Business).
Good news: many STR operation expenses can be deducted, reducing your taxable income. These include mortgage interest, property taxes, insurance, utilities, maintenance, management fees, and depreciation, the non-cash expense for your property’s deterioration over time.
State Income Tax
Most states levy an income tax on rental profits generated within their borders, even if you live in a different state. State income tax rates vary from 0% in no-income-tax states to over 13% in high-tax states like California.
Some states have specific rental income regulations, so it's essential to understand the rules in your property's location. Non-resident owners face different filing requirements than residents of the property's state.
Occupancy Tax / Lodging Tax / Transient Tax
A significant tax category for STR hosts is the Occupancy Tax, also known as Lodging Tax, Transient Occupancy Tax (TOT), or Hotel Tax. This tax is levied on the guest for temporary space occupation, and the host collects and remits it to the authorities.
Occupancy tax rates vary between states, counties, and cities, ranging from 0% to over 15% in tourist-heavy locations. The complexity increases because a single property might be subject to state, county, and city taxes simultaneously.
In some jurisdictions, Airbnb and other platforms act as "Marketplace Facilitators," automatically collecting and remitting state lodging taxes on behalf of hosts. However, this varies by location, and hosts are responsible for ensuring all required taxes are collected and remitted.
Sales Tax
Some states or localities consider STR stays a taxable service subject to standard Sales Tax, sometimes in addition to occupancy tax. While sales tax requirements are less common than occupancy taxes, they add complexity, especially since these taxes apply to the entire rental amount.
The applicability of sales tax to STRs varies by jurisdiction. Some states exempt accommodations from sales tax and apply occupancy tax instead, while others apply both taxes simultaneously.
Other Potential Taxes
Beyond these primary categories, STR operators may encounter additional tax obligations, including:
Local business taxes or license fees
Assessments of tourism improvement districts
Special district taxes
Resort fees or tourism development taxes
Higher property tax rates for STRs in some jurisdictions
These additional charges vary by location and impact your property's profitability if not accounted for in your financial planning.
How Are Airbnb Taxes Collected and Remitted?
The collection and remittance of STR taxes involve varying responsibilities between hosting platforms and property owners, depending on location and tax type.
In many jurisdictions, Airbnb and similar platforms automatically collect and remit certain taxes, primarily occupancy/lodging taxes, on behalf of hosts due to "Marketplace Facilitator" laws. These arrangements simplify compliance for hosts but vary by location. Check Airbnb's(https://www.airbnb.com/help/article/2509/tax-collection-at-airbnb) for general information, but be aware that it may not be comprehensive or current for your location.
It's crucial to understand that the host remains responsible for some taxes, even where Airbnb collects some:
All taxes not handled by Airbnb (such as income taxes)
Any local occupancy taxes not included in Airbnb's collection program
Verifying the correct taxes are being collected, regardless of Airbnb's involvement.
Where Airbnb doesn’t collect and remit taxes, hosts must register with the tax authorities, collect applicable taxes from guests (included in the listing price or charged separately), and remit these funds to the correct government agencies on their specified schedules (monthly, quarterly, or annually).
Always verify your obligations by checking state and local government websites and consulting tax professionals familiar with STR operations in your jurisdiction.
Federal Income Tax Considerations for STR Owners
All STR income must be reported to the IRS, regardless of how it's generated or processed. If you receive payments through platforms like Airbnb, you will receive Form 1099-K summarizing your earnings if you exceed the threshold. However, you're responsible for reporting all income even without this form.
STR owners can benefit from numerous deductions that reduce taxable income, including:
Mortgage Interest: Interest paid on loans secured by the rental property
Property Taxes: Annual real estate taxes, subject to State and Local Tax (SALT) deduction limitations
Insurance: Property and liability coverage
Utilities: Electricity, water, internet, cable TV (proportional to rental usage if mixed-use)
Repairs & Maintenance: Costs to keep the property in good condition
Cleaning & Supplies: Expenses for preparing the property between guests
Furnishings: Items purchased to equip the rental.
Depreciation: A non-cash expense allowing you to recover the cost of the property and improvements over time (typically 27.5 years for residential rental property).
Professional Fees: Accountant and attorney fees for your rental activity.
Travel: Expenses for traveling to manage or maintain your rental property (subject to specific rules)
Meticulous record-keeping is essential for substantiating these deductions. Maintain organized records of all income and expenses, using dedicated accounting software for rental properties. Keep receipts, invoices, bank statements, and documentation supporting your deductions for at least seven years.
The IRS has rules around rental activities, including the "14-day rule" (Masters exception). This rule allows homeowners to rent their property for up to 14 days per year without reporting the income, though expenses aren't deductible.
Airbnb taxes by state vary in rates, requirements, and administering bodies. The following overview provides a starting point for your research, with links to official resources for current information. Verify requirements through official channels and consult a tax professional familiar with STR regulations in your jurisdiction.
Conclusion
Understanding the intricate web of Airbnb and short-term rental taxes by state is paramount for any investor aiming for long-term success and profitability. From federal income tax and state-specific income taxes to varied occupancy and sales taxes, the regulatory landscape is complex and constantly evolving. By diligently researching and budgeting for these obligations, investors can avoid penalties and uncover significant tax advantages through deductions and depreciation.
Remember, staying informed and consulting with tax professionals familiar with STR regulations in your specific jurisdiction is not just about compliance, it's about maximizing your investment's potential. Utilize resources like STR Search to identify properties with favorable tax environments, ensuring your short-term rental venture is as financially sound as it is rewarding.
