Airbnb, HomeAway, and VRBO have changed the way vacationers travel. More and more guests are choosing to rent private homes rather than book hotels. With a bounty of popular destinations including Atlanta and Savannah, the Peach State offers prospective short-term rental hosts the opportunity to bring in extra income and meet new people.
But new income opportunities bring new tax implications. Like hotel, motel, and B&B stays, short-term rentals in Georgia are subject to tax. Tax authorities expect most short-term vacation rental hosts to collect short-term rental taxes from their guests and remit them to the proper authorities.
Failure to comply with state and local tax laws can result in fines and interest penalties. These may not catch up with homeowners in the short term, but the sharing economy is increasingly being placed under the proverbial microscope. It’s recommended that you address compliance before tax authorities address it for you.
Avalara has put together this guide to help you comply with Georgia short-term rental tax laws. For more information on the tax rates and jurisdictions that apply to your rental’s specific location, use our lodging tax lookup tool.
Disclaimer: No short-term vacation rental tax guide is a substitute for professional tax advice. Consider it an asset to help you understand and prioritize your vacation rental questions and concerns. Questions pertaining to specific situations or out-of-the-ordinary conditions are best solved with a certified tax professional familiar with Georgia tax laws.
Short-term Rental Tax Basics
When you start operating a short-term rental, you may not have experience with lodging taxes, but you are probably familiar with income tax. It’s important to understand the difference between the two.
Income taxes are reported and paid annually to the federal and many state governments on “taxable” income, which is income after allowed expense deductions. You pay this tax directly to the government.
In contrast, a lodging tax on a short-term rental is a percentage of the cost of your guest’s stay that is added to the price of the bill. The guest pays the tax, but you are responsible for collecting the tax and paying it to the proper tax authority.
Taxes on short-term rentals can be known as transient tax, lodging tax, occupancy tax, sales tax, bed tax, tourist tax, and more. Usually, the total tax rate you charge your guest is made up of many different taxes required by the state or local entities such as counties, cities, and towns.
What is the definition of “short-term rental” in Georgia?
For tax purposes, short-term rentals in Georgia are defined as lasting up to 90 continuous days. Residents with a signed lease for continuous residence longer than this should not be charged short-term rental taxes. It is important to note that this definition may vary from location to location. Check with your local tax authority for the most up-to-date information.
Who is required to collect and file taxes on short-term rentals in Georgia?
If you collect payment from short-term guests renting out a room, apartment, house, or other dwelling, you’re likely responsible for collecting, filing, and remitting short-term rental taxes to Georgia authorities. You may be the property owner, a renter subleasing a room, a third-party property management firm, or other party.
Location is key to compliance
The location of your rental is a crucial piece of information for short-term rental tax compliance. Your address will determine which tax jurisdictions you are required to report to, which taxes you need to collect, and your tax rates.
You can use our lodging tax lookup tool to get a rate report specific to your Georgia address. The report includes the estimated total tax rate to collect from guests, number of required registrations, number and frequency of returns per year, number of required registrations, and minimum number of rented days to qualify as a taxable stay.
It should be noted that tax rates and the rules governing them change frequently. Please consider your tax rate report to be informative rather than authoritative.
Registering with Georgia Authorities
Before you can begin collecting lodging on your short-term rental in Georgia, you are legally required to register with the Georgia Department of Revenue.
You can register online. After applying, you should receive a Georgia Tax Identification Number within 15 minutes by email. You may also be required to register with local tax authorities. Be sure to check with them for details.
Do I need to form an LLC?
In Georgia, you do not need to form an LLC in order to register with tax authorities.
Along with tax obligations, short-term rental operators may also be required to apply for local short-term rental permits, business registrations and more. Check with your local tax authority.
Local short-term rental laws
Short-term rental operators in Georgia should be aware of local regulations that apply to them, including rules covering:
- Neighborhood notification
- Building and housing standards
Homeowner Associations (HOA) located in Georgia may also have specific rules regarding vacation rentals. As a member, it’s your responsibility to be aware of the association’s policy. It’s important to review this information to understand any restrictions or limitations on short-term vacation rentals.
Other rules and regulations associated with leases/subletting or condo/co-op rules may apply to your situation. A good place to start is by reviewing your signed lease and speaking with your landlord or property manager.
Collecting Short-term Rental Tax
Once you’re registered with tax authorities, you are ready to start collecting lodging taxes, which you’ll add to your guest’s bill when they pay for their stay.
Which taxes apply to Georgia short-term rentals?
In Georgia, a number of different taxes may apply to your short-term rental, depending on your location. These can include:
Filed and remitted to
State Sales Tax
Georgia Department of Revenue
County Sales Tax
Georgia Department of Revenue
City Sales Tax
City tax authority
County or city lodging tax
Local tax authority
The exact tax requirements for your short-term rental depend on its location.
Before you can begin collecting short-term rental taxes, you need to know the correct rate to charge. Rates can and do change frequently, so it’s important to make sure you have the latest rate to avoid over- or undercharging your guests and running into compliance issues. State and local tax authorities should have the latest rates posted. You can also use our lodging tax lookup tool to find the right rates.
What charges are taxable?
In Georgia, anything that the host requires the guest to pay in order to use the accommodation is considered part of the accommodation sales price. This includes items such as cleaning fees, pet fees, rollaway bed fees, extra person fees, etc., whether they are stated separately or rolled in to the overall price of the accommodation. Basically, if it is a non-negotiable, nonrefundable fee that is mandatory in order to use the rental, it is taxable.
Fees that are refundable, such as damage deposits, are generally not subject to lodging taxes unless the host keeps the deposit.
What happens when my short-term rental platform (such as Airbnb, HomeAway, or VRBO) collects taxes for me?
Before collecting any short-term rental tax from your guests, you need to be aware of whether any taxes have already been collected for you. Some vacation rental platforms, including Airbnb, HomeAway, and VRBO, collect short-term rental taxes in some locations.
If you rent your home through an online platform, be sure to identify which taxes (state, local, or both) are being collected and remitted on your behalf to avoid mistakenly collecting tax twice or failing to collect at all.
At the time of this guide’s publication, there are no online short-term rental platforms that collect taxes on behalf of Airbnb hosts in Georgia. Short-term rental operators are responsible for registering for tax collection, collecting taxes from guests, and filing and paying short-term rental taxes on both the state and local levels.
Are guests ever exempt from taxes?
There are situations in which you aren’t required to collect lodging taxes in Georgia. For example, a guest who rents for a long term rather than a short term will be exempt from short-term lodging taxes. In Georgia, government officials may also be exempt from taxes on short-term rentals in some cases.
Filing Short-term Rental Tax Returns
After you’ve collected taxes from your guests, it’s time to file your sales tax returns with the Georgia Department of Revenue and local tax jurisdictions. In Georgia, you are required to file and pay electronically if you owe more than $500.00 in connection with any sales tax. However, if you want to make tax payments by electronic funds transfer, you must file all sales tax returns electronically.
In order to file, you will need to enter information on how much you charged for your rentals. You’ll also need to pay the tax amount due, usually via check or electronic transfer. The Georgia Department of Revenue and Finance allows credit card payments, but you may be charged convenience fees for this type of payment.
Take the time to double check your returns prior to submitting. Simple mistakes such as typos, missing signatures, and incorrect tax information can lead to unwanted delays.
When do I need to file my returns?
You will be assigned a filing frequency and due dates when you register with the tax authority. For most Georgia taxpayers, sales tax returns are due every month; however, taxpayers may submit a written request to change their filing frequency.
For taxpayers filing monthly, quarterly, or annually, sales tax returns are due the 20th day of the month following the period being reported. If a due date falls on a Federal Reserve bank holiday, Georgia State holiday, Saturday or Sunday, the due date is extended to the next banking day.
While due dates for local tax returns in Georgia are often the same as the state’s, this is not always the case. We recommend contacting your local tax authority if you have any questions.
I didn’t rent my property during this filing period. Am I still required to file a tax return for my short-term rental with the Georgia Department of Revenue?
Yes. Short-term rental operators registered with the Georgia Department of Revenue are required to file returns each assigned filing period, regardless of whether you had any short-term rental income or any short-term rental taxes were collected. Such returns are commonly known as “zero dollar returns.” Local tax authorities may have their own requirements.
Are there penalties for filing taxes late?
Whether you choose to offer short-term rentals through a marketplace like Airbnb or direct to the consumer, you open the door to tax liability at the state and local level. As tax revenue is a major source of local funding, tax authorities are becoming more aggressive in their efforts to identify individuals and businesses not in compliance with local tax laws.
The Georgia Department of Revenue places the legal responsibility for short-term rental tax revenue squarely on the shoulders of the host. Failure to register with tax authorities and file short-term rental tax returns may result in late fees, interest payments, and in extreme cases, legal action.
In Georgia, taxpayers who file or pay sales tax late must pay a penalty of 5 percent of the tax or $5, whichever is greater, and an additional 5 percent of $5 for each additional month. Filing returns that are false or fraudulent results in a penalty of 50 percent of the tax due. Interest accrues from the date the tax is due until the date the tax is paid.
I have been offering short-term rentals without collecting lodging tax. What options do I have?
If you’re already operating a short-term rental but are not collecting short-term rental taxes, you may be in violation of Georgia tax laws. Take the time to review your legal responsibility (with a tax professional, if necessary) and understand the risk of continuing to not collect tax.
Short-term rental hosts in Georgia may be able to take advantage of a voluntary disclosure agreement (VDA). A VDA offers an opportunity for hosts to proactively disclose prior period tax liabilities in accordance with a binding agreement with the Georgia Department of Revenue. VDAs are offered to encourage cooperation with state tax laws and may result in some or all penalty and interest payments being waived.
Are there options for outsourcing transient occupancy tax filing?
Yes. Many short-term rental hosts in Georgia file several state and local lodging tax returns every year. For many, filing solutions such as MyLodgeTax can relieve this burden.