Idaho vacation rental tax guide

With a bounty of popular destinations including Yellowstone National Park, Sun Valley, and Coeur d’Alene, the Gem State offers ample opportunity for short-term rental (STR) businesses.

But these opportunities come with tax obligations. Like hotel stays, STR stays in Idaho are subject to lodging tax. Failure to comply with state and local tax laws can result in fines and penalties. Tax jurisdictions are increasingly making STR tax compliance a priority, so it’s important to address compliance before tax authorities address it for you. 

Avalara MyLodgeTax put together this guide to help you comply with Idaho lodging tax laws at the state level. Local jurisdictions such as cities or counties may have their own lodging tax rules. For more information on the tax rates and jurisdictions that apply to your rental’s specific location, use our lodging tax lookup tool.

No lodging tax guide is a substitute for professional tax advice. Consider this 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 Idaho tax laws.

Lodging taxes are calculated as a percentage of the cost of your guest’s stay and added to the price on the bill. The guest pays the tax, but the STR operator is responsible for collecting and paying it to the proper tax authority.

What’s the definition of “short-term rental” in Idaho?

Reservations of 30 days or less are subject to state lodging taxes in Idaho.

Who’s required to collect and file lodging taxes on short-term rentals in Idaho?

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 lodging taxes to Idaho tax authorities. You’re not liable for lodging taxes if a third party, such as an STR marketplace, collects and remits lodging taxes for all your rental transactions.

Location is key to compliance

The location of your rental is a crucial piece of information for lodging tax compliance. Your address determines which tax jurisdictions you’re required to report to, which taxes you need to collect, and the appropriate tax rates.

Use our lodging tax lookup tool to get a rate report specific to your Idaho rental’s address. The report includes the estimated total tax rate to collect from guests, number of required registrations, number and frequency of returns per year, 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.

Local short-term rental regulations

STR operators in Idaho should be aware of the local regulations that apply to them. Homeowner associations (HOAs), condominium communities, co-ops, and landlords may also have specific rules regarding vacation rentals. It’s your responsibility to be aware of STR policies that apply to your property.

Before you can begin collecting taxes on your STR in Idaho, you’re legally required to register with the Idaho State Tax Commission if you rent your property directly to guests without using an STR marketplace such as Airbnb or Vrbo. You can register online. You may also be required to register with local tax authorities.

Once you’ve registered with tax authorities, you’re ready to start collecting lodging taxes, which you’ll add to your guest’s bill when they pay for their stay.

Which lodging taxes apply to Idaho short-term rentals?

In Idaho, a number of different lodging taxes may apply to your STR, depending on your location. These can include:

Tax rates

Before you can begin collecting lodging taxes, you need to know the correct rate to charge to avoid compliance issues. Our lodging tax lookup tool can give you a rate report specific to your Idaho address.

What charges are taxable?

In Idaho, all fees or amounts that are part of the charge for accommodations are taxable. Cancellation charges aren’t taxable and fees charged for extraordinary damage or cleaning might not be taxable if the fees are stated separately. Taxability varies for extra services such as parking.

What happens when my short-term rental marketplace (such as Airbnb or Vrbo) collects lodging taxes for me?

In Idaho, STR marketplaces are responsible for collecting all state and local lodging taxes booked through them. If taxes aren’t collected for you — such as when guests book and pay directly through you rather than through a marketplace — you’re responsible for collecting and remitting lodging taxes.

Are guests ever exempt from taxes?

There are situations in which you aren’t required to collect lodging taxes in Idaho. For example, a guest who rents for a long term rather than a short term is exempt from short-term lodging taxes.

In Idaho, lodging rentals that are directly billed and paid by the federal government, Idaho state or local governments, and other qualifying organizations are exempt from state lodging taxes. Exemption certificates are required.

After you’ve collected taxes from your guests, it’s time to file your tax returns with the Idaho State Tax Commission. In Idaho, you can file and pay the tax amount due via paper or online returns.The Idaho State Tax Commission allows credit card payments, but you may be charged convenience fees for this type of payment.

When do I need to file my returns?

You’ll be assigned a filing frequency and due dates when you register with the tax authority. For filing with the Idaho State Tax Commission, due dates are as follows:

I didn’t rent my property during this filing period. Am I still required to file a lodging tax return?

Yes. STR operators registered with the Idaho State Tax Commission are required to file returns each assigned filing period, regardless of whether you had any STR income or collected lodging taxes. 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 STRs through a marketplace like Airbnb or Vrbo, or directly to guests, you open the door to tax liability at the state and local level. As tax revenue is a major source of funding, tax authorities are becoming more aggressive in their efforts to identify individuals and businesses out of compliance with tax laws. Failure to register with tax authorities and file lodging tax returns in Idaho on time may result in late fees, interest payments, and in extreme cases, legal action.

I’ve been offering short-term rentals without collecting lodging tax. What options do I have?

If you’re already operating an STR but not collecting lodging taxes, you may be in violation of Idaho 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.

STR hosts in Idaho 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 Idaho State Tax Commission. 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 lodging tax filing?

Yes. Many STR hosts in Idaho file several state and local lodging tax returns every year. Filing solutions such as Avalara MyLodgeTax can relieve this burden.