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A year later, what pandemic rules do short-term rental hosts need to follow?

  • Mar 16, 2021 | Jennifer Sokolowsky

Backyard with two white Adirondack chairs

Just about a year ago, we began writing posts about the COVID-19 pandemic in this blog. We covered the rules and regulations that affected short-term rentals as governments took measures to fight the pandemic.

At the time, few in the industry anticipated that COVID-19 would upend everyone’s lives for more than a year. Short-term rental hosts simply adapted to the new reality — and adapted again, and again.

Over the past year, governments in different locales have placed a variety of different restrictions on vacation rentals. At the beginning of the pandemic, cancellations were the major hurdle to face as vacationers decided not to travel. Not much later, many short-term rentals were forced to close their doors entirely as governments locked businesses down.  

In some cases, such as in Florida, Georgia, and New Mexico, short-term rentals were forced to shut down while hotels were allowed to stay open. In other cases, governments restricted the types of guests vacation rentals could accept, banning guests from virus “hot spot” states. Other states, such as Maine, New Hampshire, and Vermont, required all out-of-state visitors to quarantine for 14 days.

Early on, states did offer some tax relief, in many cases allowing vacation rentals extensions to pay lodging taxes and other types of tax as well as waiving interest and penalties for late payments.

All the uncertainty left many vacation rental hosts wondering if they’d be able to make it through. However, many short-term rental businesses not only survived, but thrived.

As Americans eschewed air travel in favor of road trips closer to home, vacation rental homes provided a perfect way for people to take a break and get a change of scenery in a socially (distanced) acceptable way.

Local and state governments also gradually lifted pandemic-related restrictions on short-term rentals, generally allowing them to serve those eager guests (with waves of closures and reopenings along the way). And by the end of summer 2020, the short-term rental industry as a whole was doing better in many ways than its hotel counterpart.

Some pandemic rules still in place

Now, when the end of the pandemic appears to be in sight, virus-related shutdowns seem to be over, but short-term rental hosts still must follow some state pandemic-related rules.

  • Many states do not offer specific rules for short-term rentals, but vacation rental operators need to follow lodging industry guidelines that apply to them, such as cleaning/sanitation protocols and notifying guests about rules related to COVID-19.
  • Operators must also follow general COVID-19 regulations for employees and guests, including state rules on masks and social distancing.
  • Several states limit the number of people that can gather together, including in a short-term rental.
  • In many states, rules apply by county, depending on their reopening phase.  
  • Local governments may have their own pandemic-related rules for vacation rentals as well.

A few states still have statewide rules in place specifically for short-term rentals that go beyond cleaning/sanitizing, social distancing, and mask use.

In California, home-share hosts are not allowed to rent out rooms in properties where they reside — they can only rent out unoccupied units with separate entrances and no shared facilities. Hosts are also required to have a COVID-19 prevention plan in place.

In Massachusetts, short-term rental hosts must notify guests about the state's travel order, which requires most out-of-state travelers to quarantine for 14 days after arrival or until they receive a negative COVID-19 test result.

Short-term rental tax relief

A few states, namely California, Maryland, Massachusetts, New Mexico, New York, and Washington, also still offer businesses some sort of coronavirus-related tax relief.

Generally, these relief measures don’t exempt short-term rental hosts from collecting lodging taxes from guests and paying them to the state, but some do offer more time to pay without penalty.

MyLodgeTax can help automate and simplify tax compliance for short-term rental hosts. 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.