Mississippi vacation rental tax guide

With a bounty of popular destinations including Jackson, Gulfport, and Biloxi, the Magnolia State offers ample opportunity for short-term rental (STR) businesses.

But these opportunities come with tax obligations. Like hotel stays, STRs in Mississippi are subject to lodging taxes. Failure to comply with lodging 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 Mississippi lodging tax laws at the state level. 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 lodging tax questions and concerns. Questions pertaining to specific situations or out-of-the-ordinary conditions are best solved with a certified tax professional familiar with Mississippi tax laws.

Lodging tax basics

Lodging tax is 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 Mississippi?

Income from hotels, motels, tourist courts or camps, and trailer parks are subject to lodging taxes. Hotels are defined as one or more rooms where sleeping accommodations are supplied for pay or other consideration to transient guests.

Who's required to collect and file taxes on short-term rentals in Mississippi?

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 Mississippi tax authorities.

You’re not required to collect lodging taxes if a third party, such as an STR marketplace, collects taxes for you on all your STR 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 Mississippi 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 Mississippi should be aware of the local regulations that apply to them, including rules covering:

• Legality
• Permits, licenses, and registration
• Zoning
• Advertising
• Neighborhood notification
• Building and housing standards

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.

Registering with tax authorities

Before you can begin collecting taxes on your STR in Mississippi, you’re legally required to register with the Mississippi Department of Revenue. You can register online to receive a sales tax license.

Collecting lodging taxes

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 taxes apply to Mississippi short-term rentals?

In Mississippi, state sales tax and local lodging taxes may apply to your STR, depending on your location. These can include:

Tax rates

Before you can begin collecting STR 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 Mississippi address.

What charges are taxable?

In Mississippi, all charges for accommodations are taxable. This includes items such as cleaning fees, pet fees, rollaway bed fees, extra person fees, valet or laundry services, cancellation fees, no-show fees, etc.

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

In Mississippi, STR marketplaces such as Airbnb are required to register with the state Department of Revenue and collect state and local sales taxes on lodging booked through them. You do not have to register, collect, or remit vendor’s use tax if you’re selling through a marketplace facilitator only.

If taxes aren’t being collected for you, you’re responsible for collecting and remitting them to state tax authorities.

Are guests ever exempt from taxes?

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

In Mississippi, accommodations purchased by buyers including schools; nonprofit agencies; the Mississippi Band of Choctaw Indians; and federal, state, or local governmental agencies may be exempt from state sales taxes. Guests may be required to present exemption certificates.

Filing lodging tax returns

After you’ve collected taxes from your guests, it’s time to file your tax returns with the Mississippi Department of Revenue. In Mississippi, you can file returns and pay tax online. The Mississippi Department of Revenue allows credit card payments, but you may be charged convenience fees.

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 Mississippi Department of Revenue, state sales tax due dates are as follows:

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 Mississippi Department of Revenue?

Yes. STR operators registered with the Mississippi Department of Revenue 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.”

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 local funding, tax authorities are becoming more aggressive in their efforts to identify individuals and businesses not in compliance with tax laws. Failure to register with tax authorities and file STR tax returns in Mississippi 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 Mississippi 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 Mississippi 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 Mississippi 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 lodging tax filing?

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