In Hawaii, a pending bill could overhaul vacation rental regulations statewide amid a housing crisis exacerbated by the wildfires that hit Maui in August 2023.
The Form TA-1 in Hawaii is for applying for a Transient Accommodations Tax (TAT) license, which is necessary for short-term rentals (STRs).
The tax rate on your gross rental proceeds is 10.25%.
Wisconsin short-term rental owners must collect and remit taxes, including 5% sales tax statewide, 0.5% county tax in select areas, and a county-specific room tax, which varies in each county.
Wisconsin property owners operating short-term vacation rentals or tourist room houses, including vacation homes and excluding private boarding rooms or bed and breakfasts, must acquire a permit.
All individuals operating a short-term rental property are liable for taxes unless they lease their property for fewer than 14 nights annually.
The Michigan lodging tax is 6%, including the cleaning fee, for reservations lasting 30 nights or less. Lodging establishments like hotels, trailer camps, tourist camps, and rooming houses are required to pay 9% lodging taxes.
Michigan residents who meet specific criteria as homeowners or renters may be eligible for the state’s homestead property tax credit, which assists in property tax payments. Complete the MI-1040CR Form to determine eligibility for credit.
Vacation homeowners can claim rental property tax deductions when they lease their residential property or apartment unit for more than 14 consecutive days.
Homeowners operating a short-term rental (STR) business can claim exemptions, and those over 65 may qualify for the Homestead Exemption, which waives property taxes on the first $50,000 of their home’s value.
South Carolina STR owners must collect and remit the 7% statewide sale tax, plus any applicable local lodging tax.
Property owners who lease their property for fewer than 14 days annually are exempt from reporting their rental income.
In Alaska, short-term rental hosts who use online platforms or independently oversee their vacation rental properties must report their earnings when their income taxes are due.
Alaska has no statewide lodging tax. However, each city municipality may mandate a hotel/motel room tax.
If you operate a vacation rental business and earn profits from leasing, you must obtain a business license in Alaska.
Short-term rentals (STR) in Maine are subject to a lodging or option sales tax of 9% on the rental amount for each transaction.
To comply with Maine Revenue Services regulations, property owners must register for and collect sales tax on rentals, regardless of their advertising status.
In Maine, stays lasting fewer than 15 days and managed by a sole proprietor overseeing a single rental unit are exempt from sales tax. Any lease for fewer than 15 days in a calendar year is not considered a taxable income.
All vacation rental owners in Washington State must officially register their properties as businesses.
In Washington, the retail sales tax rate is 6.5%, which applies to transactions conducted via short-term rental (STR) platforms such as Airbnb and VRBO.
Property owners who lease their properties for fewer than 14 days don’t have to report their rental income. However, they can’t claim deductions associated with rental expenses.
The Internal Revenue Service (IRS) may allow you to deduct the mortgage interest on your primary residence during the period your vacation rental is leased.
Transient room taxes in Kentucky are 1%, including cleaning fees.
Exceeding rental income with deductible expenses may eliminate taxable income and generate losses for tax benefits; the 14-day rule exempts properties leased for fewer than 14 days annually from tax reporting and deductions.
The standard overnight lodging tax in Ohio is 6%. However, lodging taxes may vary from county to county and exceed the 6% maximum tax rate.
Short-term rental hosts operating a vacation rental usually earn a passive income and can benefit from more significant deductions on their tax returns. You may qualify for active income if you’re involved in day-to-day operations.
Depending on the city you reside in, you may be required to obtain a permit to operate a vacation rental. Columbus requires hosts to get a permit.
