Ohio vacation rental tax guide

Airbnb and Vrbo have changed the way vacationers travel, with many guests choosing to rent private homes rather than book hotels. With a bounty of popular destinations including Cleveland, Cincinnati, and Columbus, the Buckeye State offers ample opportunity for short-term rental (STR) businesses.

But these opportunities come with tax obligations. Like hotel stays, STR stays in Ohio are subject to lodging taxes. Failure to comply with state and local tax laws can result in fines and interest 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 Ohio 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 Ohio 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 Ohio?

Ohio levies state lodging taxes on “hotels,” which are defined as places “where sleeping accommodations are offered to guests, in which five or more rooms are used for the accommodation of such guests, whether the rooms are in one or several structures.” Transient guests are defined as people occupying a room or rooms for sleeping accommodations for less than 30 consecutive days. Local tax jurisdictions may have their own lodging tax definitions and requirements.

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

If you offer five or more sleeping rooms for short-term rental, you're likely responsible for collecting, filing, and remitting sales taxes to the Ohio Department of Taxation. Tax authorities on the local level may have different rules.

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 Ohio 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. 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 Ohio 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 Ohio, you’re legally required to register with the Ohio Department of Taxation. You can register online to receive a vendor’s license as well as instructions on filing your lodging taxes.

Depending on your jurisdiction, you may also be required to register with your local tax authority and file local lodging tax returns.

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 Ohio short-term rentals?

In Ohio, 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 Ohio address.

What charges are taxable?

In Ohio, the total amount charged for a room and food is subject to state sales tax if the establishment offers five or more sleeping rooms for short-term rental. This includes items such as cleaning fees, pet fees, rollaway bed fees, extra person fees, etc. Local tax authorities may have their own requirements.

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

In Ohio, some STR marketplaces such as Airbnb and Vrbo collect local lodging taxes from guests when a stay is paid for. If taxes aren’t being collected for you, you’re responsible for collecting and remitting them to  tax authorities.

Are guests ever exempt from taxes?

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

In Ohio, purchases of accommodations by organizations including the U.S. government, Ohio state government, other state governments that exempt sales to the state of Ohio, charities, churches, and nonprofit organizations may be exempt from sales tax. Exemption certificates may be required. Local tax authorities may have their own requirements.

Filing lodging tax returns

After you’ve collected taxes from your guests, it’s time to file your tax returns with the Ohio Department of Taxation. In Ohio, you can file returns and pay tax online. The Ohio Department of Taxation 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 Ohio Department of Taxation, sales tax 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 with the Ohio Department of Taxation?

Yes. STR operators registered with the Ohio Department of Taxation are required to file returns each assigned filing period, regardless of whether you had 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 local funding, tax authorities are becoming more aggressive in their efforts to identify individuals and businesses violating tax laws. Failure to register with tax authorities and file lodging tax returns in Ohio 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 Ohio 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 operators in Ohio 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 Ohio Department of Taxation. 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 Ohio file several state and local lodging tax returns every year. Filing solutions such as Avalara MyLodgeTax can relieve this burden.