The ease of listing your home, vacation property or a room on Airbnb or similar web platform has turned a lot of individuals into landlords. We hear about these landlords being subject to local taxes such as the transient occupancy tax (hotel tax) and business license tax, but what about state and/or local sales tax?
In some jurisdictions, sales tax applies. So that is one more thing to check. (And don’t forget that one of the first things to check is if the local jurisdiction even allows short-term rentals!)
What do you think?
Original Post By: Annette Nellen
Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.
Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.
Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.
Prior to joining SJSU, Annette was with Ernst & Young and the IRS.
2 comments on “Sales Tax On Short-Term Rentals? Maybe!”
Hello Annette,
Thank you for your post on the potential taxability of short-term rentals. It’s probably not what most homeowners would think about, but I know home-rule city auditors in Colorado have specifically discussed the Airbnb and similar sites issues at a quarterly Colorado Tax Audit Coalition meeting I attended.
The presenter provided examples and suggested other cities go online and see what properties are being advertised in their cities. They do not want to miss out on the sales tax.
Thank you for the comment. It’s a good reminder that types of taxes that can apply vary from jurisdiction to jurisdiction. Best to know in advance before even setting the rental. I’ve also heard of cities going to the rental sites to see what is listed.
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