Compliance complexity increases as short-term rental operators navigate various booking channels

Short-term rental (STR) hosts have always faced a complex compliance landscape as state and local tax obligations can vary widely. As the industry has grown, many owners have chosen to partner with marketplaces like Vrbo or Airbnb, assuming the platform will handle lodging taxes on their behalf.

Sometimes marketplaces do take care of this, but often they handle only part of the obligation, with the owner responsible for the rest. Airbnb and Vrbo both state in their own fine print that the platform may collect certain taxes but not others in any given jurisdiction, and that hosts are ultimately responsible for anything the platform doesn’t collect.

Professional property managers or management groups that handle bookings on behalf of the owners may find themselves in an awkward position in the middle when it comes to lodging taxes. While some may be required to collect and remit on behalf of every property they manage, others are in a jurisdiction that places the obligation entirely on the owner. The same management company may be required to be the tax collector in one market but not in the next.

Owners, marketplaces, and managers alike find themselves in a tangled web where the answer to “Who is responsible for the lodging tax on this booking?” shifts with how the booking was arranged and where the property sits.

Every booking should answer four questions

Owners, hosts, and managers should all approach each new reservation and its associated lodging tax with four questions top of mind:

1. Who calculates the tax?
2. Who collects it?
3. Who remits it?
4. Who has to file lodging tax returns?

How does an owner answer these questions for their property?

Since lodging tax rules are typically set locally, the jurisdiction needs to be your single source of truth. Check the tax authority of the state, county, and/or city where the property is located. Then check the current terms of every channel you book through, including managers and marketplaces. Most disclose which taxes they collect and remit in each jurisdiction and update them as laws and agreements change. Anywhere the jurisdiction’s rules and the platform’s terms don’t line up is a gap that falls to the owner to close.

Local lodging tax laws can and do change often. Here are some recent examples.

Austin, Texas: Since April 2025, the law requires whoever processes the reservation to collect and remit the city’s 11% hotel occupancy tax (HOT). For reservations booked and payments processed through Vrbo, Airbnb, or a management company, that platform now handles collection and remittance rather than the owner. However, STR owners are required to provide quarterly information to the city (separate from lodging tax returns) stating how much HOT each platform collected on the owner’s behalf. When guests book and pay owners directly, the responsibility reverts to the owner to calculate, collect, and remit the tax.

Illinois: Since July 1, 2025, responsibility for collecting Illinois Hotel Operators’ Occupation Tax falls on whoever acts as a “re-renter,” defined as the party that collects or processes payment for the stay and facilitates the booking. This can be a marketplace or a property manager who handles guest payments on an owner’s behalf.

Delaware: Effective January 1, 2025, the state implemented a 4.5% tax on STRs. Accommodations intermediaries, defined as whoever facilitates or arranges the rental, are required to collect the tax from guests. That expressly includes marketplaces like Airbnb and Vrbo, real estate brokers, and owners who arrange stays directly with guests. Delaware avoids double collection by naming one responsible party per stay: an owner who books exclusively through another intermediary such as a marketplace isn’t considered an intermediary and doesn’t need to register or collect the tax, while an owner renting directly must license, collect, and remit. Whether responsibility lands on the manager, the marketplace, or the owner turns entirely on who arranged the booking.

For years, owners and operators have chosen their booking channels around factors such as commission rates, guest ownership, brand control, and how quickly a listing gets booked. Tax collection may have been an afterthought or an added bonus but was never the main focus. That’s changing as various channels come with different compliance requirements.

For example, a booking made through a marketplace or a property management company that collects and remits lodging tax is a very different compliance event than a direct booking through an owner’s website or by phone, which often hands calculation, collection, remittance, and filing back to the owner in full.

This has a real and underappreciated consequence for the industry’s current direct-booking push. When an owner moves a reservation off-platform to save on commission, they likely absorb the entire tax obligation. The margin looks better on paper, but the compliance surface grows with it.

The point for hosts isn’t that direct booking is bad, or that marketplaces are safer. It’s that the decision to add, drop, or lean into a channel is no longer purely a revenue decision. It’s a compliance decision too.

What operators can do about it

The good news is that lodging tax compliance is manageable with a simple, repeatable exercise. We recommend owners build a channel-by-channel compliance map:

• List every booking source you use down one side (each marketplace, your direct site, real estate or property management company, any others).
• Across the top, answer the four questions for each: who calculates, who collects, who remits, who files and/or provides any other required information.
• Any cell you can’t confidently fill in is an exposure point to resolve before your next booking.

Avalara MyLodgeTax specializes in exactly this kind of complexity. Rather than tracking which platform collects what in each jurisdiction and which filing obligations remain after that collection, owners and operators can rely on Avalara MyLodgeTax to automate registration, filing, and remittance for state and local lodging taxes across every market they operate in.

The result is a clean paper trail and confidence that direct bookings, bookings through property managers, and marketplace bookings alike are covered. To see how it fits your portfolio, connect with the Avalara team for a walkthrough of your specific markets and channels.