Utah vacation rental tax guide

With a bounty of popular destinations including Zion National Park, Park City, and Moab, the Beehive State offers ample opportunity for short-term rental (STR) businesses.

But these opportunities come with tax obligations. Like hotel stays, STRs in Utah are subject to lodging taxes. STR operators are required to collect lodging taxes from guests and remit them to the proper authorities.

Failure to comply with 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 Utah 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 Utah tax laws.

Lodging tax is calculated as a percentage of the cost of your guest’s stay and added to the price of 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 Utah?

In Utah, the use of accommodations for less than 30 consecutive days is subject to lodging taxes.

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

If you collect payment from short-term guests renting out an apartment, house, or other dwelling, you’re likely responsible for collecting, filing, and remitting lodging taxes to Utah tax authorities.

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 your tax rates.

Use our lodging tax lookup tool to get a tax report specific to your Utah 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 Utah 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.

Before you can begin collecting taxes on your short-term rental in Utah, you’re legally required to register with the Utah State Tax Commission to receive a state tax ID number.

Once you’re 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 Utah short-term rentals?

In Utah, STRs are subject to state sales tax and transient room tax and may be subject to local transient room tax, depending on the jurisdiction.

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 Utah address.

What charges are taxable?

Utah imposes lodging tax on amounts paid for temporary lodging, including charges such as pet fees, damage fees, reservation fees, and cleaning fees. Cancellation fees and parking fees aren’t taxable. Some charges may be subject to sales tax but not to transient room tax, and vice versa.

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

In Utah, “marketplace facilitators” are required to collect Utah lodging taxes for you when the listing is booked. You’re still required to hold a sales tax license and file lodging tax returns, but you don’t need to report transactions made through a marketplace.

If taxes aren’t being collected for you, such as when guests book directly with you rather than through a marketplace, you’re responsible for collecting and remitting lodging taxes.

Are guests ever exempt from lodging taxes?

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

• Federal government agencies, foreign diplomats, and qualified religious and charitable organizations are exempt from lodging taxes if they pay directly for the accommodations and provide proof of exemption.

After you’ve collected taxes from your guests, it’s time to file your tax returns with the Utah State Tax Commission. In Utah, you can file returns and pay tax online. The Utah State Tax Commission allows credit card payments, but may charge a fee.

When do I need to file my returns?

You’ll be assigned a filing frequency and due dates when you register with the Utah 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 with the Utah State Tax Commission?

Yes. STR operators registered with the Utah 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.”

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 Utah 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 Utah tax laws. Take the time to review your legal responsibility (with a tax professional, if necessary) and understand the risks.

STR operators in Utah 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 Utah 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 operators in Utah file several lodging tax returns every year. Filing solutions such as Avalara MyLodgeTax can relieve this burden.