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Seattle to regulate and tax short-term rentals in 2019

  • Dec 19, 2017 | Gail Cole

 Seattle short-term rentals will be subject to new regulations and taxes in 2019.

Travelers may benefit from the short-term rentals that have proliferated thanks to Airbnb, HomeAway, and similar platforms, but city and state coffers have suffered. Short-term rentals, which have gone largely unregulated and taxed since their inception, have taken a bite out of lodging tax revenue in many parts of the country. Like many cities and states, Seattle has been struggling to adapt.

The dramatic increase in short-term rental units of recent years has compounded Seattle’s infamous housing crunch. After examining the issue for years, the Seattle City Council recently finalized a plan to “preserve the availability of long-term rentals while allowing the economic opportunity that short-term rentals offer residents of Seattle.” It takes effect Jan. 1, 2019.

The new regulations require all short-term rental operators in the city to obtain a short-term rental operator license. This will entitle them to rent one dwelling unit, or a portion thereof, in addition to their own primary residence, which they may also rent out. The city is also allowing a few exceptions for operators in business prior to Sept. 30, 2017.

In addition to regulating short-term rentals, Seattle will tax them. The rate for shared units or private rooms will be $8 per night, while the rate for an entire until will be $14 per night. Platform providers (i.e., Airbnb, HomeAway) may also have to pay a per-night fee for lodging booked through the platform. Seattle expects to bring in $7 million annually from short-term rental taxes, which it will use to help curb displacement.

Look for details about Seattle’s new regulations and taxes from the Seattle City Council in 2018. In the meantime, find additional information about short-term rental taxes and the tax automation software that facilitates compliance at MyLodgeTax.

photo credit: Seattle Skyline via photopin (license)

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.