Understanding the specifics of long-term stays can become complex, especially with the increasing popularity of short-term rentals and the diverse needs of guests. The stakes are high because missteps can lead to overcharging your guests and compliance issues.
For many travelers, staying more than 30 days in one place shifts their stay from short-term to long-term, which can change how their taxes are filed. Most places exempt these long-term guests from certain taxes once they hit this 30-day mark. It sounds straightforward, but the reality is more involved. For the initial 30 days, you’re still on the hook for posting taxes to the guest’s account. When day 31 rolls around, not only do you need to stop charging these taxes, but you also have to issue credits for the taxes you collected during the past month.
This manual adjustment extends to return filings — especially when stays overlap months. You’ll need to make special adjustments in your return filings to reflect the correct taxes. This often requires manual inputs, which leaves room for error.
To keep on top of these rules and ensure you’re handling long-term stays correctly, it’s helpful to have a solid understanding of the tax laws and lodging tax requirements that apply to your hotel locations in each state.