Frequently Asked Questions
Most of the time the answer is yes. There are only a handful of states in which vacation rentals are exempt from lodging tax.
Vacation rentals usually pay the same taxes as hotels. Short-term renting of your vacation property triggers the requirement to collect and remit taxes. These taxes (known by many names: sales tax, occupancy tax, lodging tax, room tax, accommodations tax, bed tax, hotel tax, etc.) are different from the income taxes required by the IRS and states, which are filed once a year. These taxes are paid to city, county and state tax agencies each month and quarter. They play an important part in funding the infrastructure where your rental resides such as tourism promotion, beach preservation, transportation system, airline subsidies, snow removal, and other operating costs to support and encourage tourism.
As the popularity and growth of vacation rentals has increased, so has the enforcement of these taxes. Tax agencies nationwide commonly monitor vacation rental sites in search of violators.
Many vacation rental owners are unaware or confused by the myriad of tax requirements. As a result, owners sometimes go months or years without paying the required taxes. If you are in this situation there are a number of ways to get caught up and mitigate your liabilities. A common mistake people make is to further delay or put off becoming compliant because they are concerned about past non-compliance.
The good news is that most agencies have programs for exactly this issue – typically called voluntary disclosure programs. These agencies are motivated to get you complying and collecting these taxes. The programs allow you to pay your back tax liability and have most of the penalties waived.
MyLodgeTax can work with you on the best solution to resolve your back tax issues and try to mitigate penalties and interest. We will also file late or amended returns on your behalf. We charge $300 per agency to administer a formal back tax or voluntary disclosure case. Alternatively, we can file late or amended returns to get you caught up (and request penalty waivers when appropriate). We charge $50 per return for late or amended returns.
Exemptions vary by state, and some by city and counties within a state. Non-profit groups, church/religious organizations, certain government officials and universities are common groups that may be exempt from these taxes, but not always. Most states require the exempt organization to have an exemption certificate and pay with organization funds.
It’s true that you can do this on your own without MyLodgeTax. You can also wash your dishes by hand, mow your own lawn, make your own coffee or do your own income tax return. However, many times we choose to pay someone else to do these and other things because it affords convenience, eliminates a hassle, ensures it gets done right, costs less or creates time to focus on more important things. Taxes are something you definitely want to get right – and MyLodgeTax makes it easy!
While the guest pays these taxes, you as the owner or manager of the vacation rental are responsible for collecting and filing them. If you did not collect the tax from your guest, you are still responsible for the taxes.
If we determine you are not required to pay and collect these taxes, we will give you a full refund of your license fee and cancel your service without any additional charges.
Yes! These taxes are known by many different names and we provide expertise with them all within the MyLodgeTax service: sales tax, occupancy tax, lodging tax, accommodations tax, bed tax, hotel tax, etc.
No. You can cancel at any time without any obligation. However, you are still obligated to collect and pay these taxes.
No-income taxes and lodging taxes are not the same. Income taxes come out of your personal income, whereas lodging taxes are calculated off of revenue earned from renting out your home or room.
The definition of a short-term rental (and therefore taxable) varies by location. In some states, short-term rentals are defined as less than 28 days but can be as high as 185 days in other states. In most states, a 30 day rental or monthly rental is considered long-term and therefore exempt from these taxes. The bottom line is that each tax jurisdiction must be thoroughly researched to identify and understand specific rules.
These taxes are charged on the total payments (money or value) received from the renter, including rent, cleaning fees and any other mandatory fees such as a booking fee, extra person charge, pet fee, etc. Refundable deposits are not taxable.
No. These taxes are applied on gross revenue or gross receipts and there are no deductions for any expenses.
If you rent out your property, believe it or not, you’re now operating a business and must obtain the proper business license(s) in order to rent your property legally. MyLodgeTax handles that too, but there are additional fees to purchase any required licenses. There is a set-up time of roughly 30 days as we work with various tax authorities on your behalf. But once you’re set up, just login to our simple and secure online application and report your rental revenues. That’s it. Easy peasy. We take it from there, filing your returns and remitting tax payments on your behalf. We renew your licenses as well!