New Hampshire vacation rental tax guide
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NOTE: The outbreak of COVID-19 (caused by the coronavirus) may have impacted vacation rental tax filing due dates in New Hampshire. Please consult your local tax authority for specific details. For more information, visit our ongoing coverage of the virus and its impact on sales tax compliance.
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 Concord, Hampton, and Portsmouth, The Granite State offers prospective short-term rental hosts the opportunity to bring in extra income and meet new people.
But new income opportunities bring new lodging tax implications. Like hotel, motel, and B&B stays, short-term rentals in New Hampshire are subject to room tax. New Hampshire tax authorities expect 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 tax laws can result in fines and interest penalties. These may not catch up with hosts in the short term, but the short term rental industry in under increasing scrutiny for tax compliance. It’s recommended that you comply with the requirements before tax authorities contact you.
Avalara has compiled this guide to help you comply with New Hampshire short-term rental tax laws. For more information on the room 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 one data point 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 New Hampshire tax laws. Also, MyLodgeTax can confirm the exact requirements and manage these taxes for you, once you are a customer.
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 total rent your guest’ pays, which is added to the price of the bill. The guest pays the room tax, you are responsible for collecting the tax and paying it to the proper tax authorities.
Taxes on short-term rentals can be known as rooms tax, lodging tax, occupancy tax, bed tax, tourist tax, and more. In New Hampshire,short-term rentals are subject to state Meals and Rooms (Rentals) Tax.
What is the definition of “short-term rental” in New Hampshire?
Short-term rentals in New Hampshire are defined as “one or more rooms in a residential unit for occupancy for tourist or transient use” that are rented for fewer than 185 consecutive days. Residents with a signed lease for continuous residence longer than 185 days should not be charged short-term rental taxes.
Who is required to collect and file taxes on short-term rentals in New Hampshire?
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 New Hampshire authorities. You may be the property owner, a renter subletting a room, a third-party property management firm, or other party.
Registering with State Authorities
Before you can begin collecting taxes on your short-term rental in New Hampshire, you are required to register with the New Hampshire Department of Revenue. You can register online. When you register, you will receive a Meals and Rooms (Rentals) Tax license as well as instructions on filing your rooms taxes. You are required to include your license number in any advertisements for your short-term rental.
Do I need to form an LLC?
In New Hampshire, you do not need to form an LLC in order to register with tax authorities.
Local short-term rental regulations
Short-term rental operators in New Hampshire should be aware of local regulations that apply to them, including rules covering:
- Permits, licenses, and registration
- Neighborhood notification
- Building and housing standards
Homeowner Associations (HOA) located in New Hampshire 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.
Collecting Short-term Rental Tax
Once you’re registered with tax authorities, you are ready to start collecting room tax, which you’ll add to your guest’s bill when they pay for their stay.
Which taxes apply to New Hampshire short-term rentals?
In New Hampshire, state Meals and Rooms (Rentals) Tax applies to your short-term rental. There are no additional local (city or county) taxes in New Hampshire.
|Tax Name||Filed and Remitted To|
|State Meals and Rooms (Rentals) Tax||New Hampshire Department of Revenue|
Before you can begin collecting short-term rental taxes, you need to know the correct rate to charge. The room tax rate in New Hampshire is currently 9.0%. Rates can and do change , so it’s important to make sure you have the latest rate to avoid over- or undercharging your guests and running into compliance issues. Tax authorities should have the latest rates posted.
You can use our lodging tax lookup tool to get a rate report specific to your New Hampshire address. The report includes the estimated total tax rate to collect from guests, and minimum number of rented days to qualify as a taxable stay.
What charges are taxable?
In New Hampshire, all charges for accommodations and meals are taxable. This includes items such as cleaning fees, pet fees, rollaway bed fees, extra person fees, etc., that are required in order to use the accommodations.
Fees that are refundable, such as damage deposits, are generally not subject to lodging taxes even if you keep the deposit. The same is true for optional fees. For example, if you perform optional dry cleaning and laundry services for guests, the cost to the guest must be stated separately on the invoice and is not subject to lodging tax.
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 New Hampshire short-term rental taxes for short-term rental hosts when the listing is booked. However, platforms may not collect taxes in all locations.
At the time of this guide’s publication, Airbnb collects state Meals and Rooms (Rentals) Tax for all New Hampshire hosts. HomeAway/VRBO do not collect lodging taxes on behalf of their hosts in New Hampshire.
Even if your online rental platform collects taxes for you, do not assume that the platform is taking care of short-term rental tax registration for you. Often, when rental platforms collect lodging taxes in a particular jurisdiction, they do not file lodging tax returns on behalf of individual hosts. Rather, they pay a lump sum to the jurisdiction and often do not share identifying information on hosts.
Are guests ever exempt from taxes?
There are situations in which you aren’t required to collect lodging taxes in New Hampshire. For example, a guest who rents for a long term (more than 185 days) will be exempt from short-term lodging taxes. In New Hampshire, accommodations purchased by certain buyers including the State of New Hampshire, the federal government, schools, medical facilities, and diplomatic personnel may be exempt from short-term lodging taxes. Make sure you obtain an exemption certificat from all exempt guest.
Filing Short-term Rental Tax Returns
After you’ve collected taxes from your guests, it’s time to file your room tax returns with the New Hampshire Department of Revenue . In New Hampshire, you can file short-term rental tax returns online. 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 New Hampshire Department of Revenue 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. At the state level, monthly due dates are as follows:
|Filing Frequency||Due Date|
|Monthly||Due the 15th of the month following the close of the filing period.|
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 New Hampshire Department of Revenue?
Yes. Short-term rental operators registered with the New Hampshire 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.”
Are there penalties for filing taxes late?
Whether you choose to offer short-term rentals through a marketplace like Airbnb or directly to the consumer, you open the door to tax liability if you are not collecting and remitting room taxes. 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. Failure to register with tax authorities and file short-term rental tax returns in New Hampshire on time may result in late fees, interest payments, and in extreme cases, legal action.
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 New Hampshire 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 New Hampshire 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 New Hampshire 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.
Also, MyLodgeTax has programs that can get you caught up with any filings and back taxes due, include VDA’s mentioned above.
Are there options for outsourcing transient occupancy tax filing?
Yes. Many short-term rental hosts in New Hampshire usefiling solutions such as MyLodgeTax to revliev this burden and ensure taxes are always filed correctly and on time.