Chelan County steps up enforcement of short-term rental laws

Chelan County’s code enforcement department is now fully staffed and the county is planning to crack down on illegal short-term rentals. Hosts who continue operating after receiving a warning letter can face fines of $750 per day.

As of July 2021, Chelan County Community Development estimated that up to 1,300 illegal short-term rentals were doing business in the county.

The county passed its vacation rental regulations in August of 2021. The ordinance requires short-term rental operators to get a permit and divides short-term rentals into different tiers according to occupancy capacity. All vacation rentals must operate out of an owner’s primary dwelling or a legally established accessory dwelling unit.

The rules cap short-term rentals at 6% of total housing units in unincorporated Chelan County; in the Manson area, the limit is 9%. The caps apply to properties that house more than eight people and are non-owner occupied.

Since passage of the short-term rental law, the county has issued 721 tier one permits, which apply to vacation rentals that are owner-occupied and rented a maximum of 15 days in a calendar year.

Tier two permits are issued to short-term rentals that are not owner-occupied and have a maximum occupancy of 12 people. Tier three permits apply to properties that have a maximum occupancy of 16 and can be either owner-occupied or non-owner occupied.

Under Chelan County’s law, short-term rental owners must designate an agent who can be available to respond to issues at the property within 60 minutes. Hosts must also follow rules on parking, garbage, noise, and occupancy. Vacation rental properties that have two noise disturbance violations within six months may face revocation of their licenses. Vacation rental hosts are also required to apply for conditional use permits for larger events such as weddings.

In September 2021, the county changed the short-term rental code to require existing operators to immediately comply with certain health and safety requirements in order to qualify for a valid permit, rather than having one year to come into compliance. The state Growth Management Hearings Board ruled that the county must change that provision. County commissioners rolled the provision back in May, meaning that existing hosts would have the original amount of time to meet requirements.

Chelan County short-term rental hosts are required to collect state and local lodging taxes from their guests and pass them on to tax authorities. Both Airbnb and Vrbo collect state and local lodging taxes for Washington state hosts.

Even though these marketplaces collect lodging taxes on behalf of operators, Washington state hosts are still required to register with the state Department of Revenue and file lodging tax returns reporting their rental income.

Washington state vacation rental hosts whose taxes are not collected by marketplaces are responsible for registration, collection, and filing of all taxes due on their short-term rentals. MyLodgeTax can help Washington state short-term rental hosts automate and simplify lodging tax compliance.

For more on short-term rental taxes in Washington state, 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.