Avalara MyLodgeTax > Blog > State and Local News > New Long Beach law requires short-term rentals to get permits, collect tax

New Long Beach law requires short-term rentals to get permits, collect tax

  • Jul 7, 2020 | Jennifer Sokolowsky

Long Beach, California

In Long Beach, California, the City Council has legalized vacation rentals for the first time with a new law that establishes rules for their operation. The city has been discussing and developing short-term rental rules since 2018.

Under the new ordinance, hosts are required to hold a permit in order to operate a short-term rental and permit registration numbers must be included in advertisements. Operators are limited to one primary-residence short-term rental within the city, and if the operator is not the owner, the owner must provide written consent.

The rules also restrict the number of short-term rental units within multifamily buildings, according to the size of the building. For example, only one short-term rental is allowed in buildings with two to 10 units, while buildings of 101 or more units are allowed to have up to 15% short-term rentals.

Among other rules, hosts are also required to:

  • Designate a contact who can be available to respond to rental complaints or problems within an hour
  • Follow occupancy limits and noise and safety rules
  • Get a city permit for large-scale events
  • Provide proof of $1 million coverage in liability insurance or conduct short-term rental transactions through a platform that provides the equivalent

According to the law, hosting platforms must include short-term rental registration numbers on any listings and provide monthly reports on their bookings to the city.

Currently, the ordinance only allows rentals in which hosts are present on site during guests’ stays. The council is expected to change the law to allow unhosted stays next year.

The regulations go into effect four months after the mayor signs them. However, property owners located in the city’s coastal zone will have to wait for the rules to be approved by the California Commission before they can offer short-term rentals.

The new law also makes vacation rental hosts responsible for collecting the city’s transient occupancy tax from guests and remitting the tax to the city via monthly tax returns. If a short-term rental hosting platform such as Airbnb or Vrbo agrees to collect the tax on behalf of its hosts, the platform and the host share responsibility to collect and pay the tax.

Airbnb collects the city tax on behalf of its Long Beach hosts, while Vrbo does not.

MyLodgeTax can help automate and simplify tax compliance for Long Beach hosts. For more on lodging taxes in California, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.