UNITED STATES OF AMERICA
In the United States, short-term rental are often also referred to as Vacation Rentals or Transient Accommodations which are described as the rental of a residential dwelling unit, accessory building or any unit or group of units in a condominium, cooperative or apartment building that is rented in whole or in part to a transient occupant on a temporary basis for short term periods.
Transient occupants or guests are defined as people who rent out a place other than their permanent place of residence for a short term period.
There is no general maximum length of stay in the United States as the maximum number of days of rentals varies from state to state and local jurisdiction to local jurisdiction. But it is usually for about 30 days. However, few states allow a length of stay of up to 90 days or 120 days. Also, in some states such as South Dakota, Vermont, and Wisconsin, accommodation rentals that are less than 7 - 14 days per calendar year are considered occasional and not treated as short-term rentals.
There is no national rule regarding short-term rental in the United States instead there are statewide laws such as registration requirements and tax requirements, that govern the rental of residential units. These laws may vary for residents and those living out of state who own property in the state and are renting their spare rooms or other types of lodging to visitors.
Some cities and other local jurisdictions also regulate short-term rentals in areas such as building and housing standards, zoning, insurance requirements, Health and Safety standards, HOA bans, noise restrictions, etc.
There is no national tax that affects short-term rental rather, taxes are imposed on a sub-national level. Each state and local jurisdiction within the states has the authority to impose its own short-term rental tax, this tax is referred to as occupancy tax, lodging tax, room tax, etc., depending on the location of the property. Lodging tax is a certain percentage of the total rent collected from the guest that is remitted to tax authorities. Other taxes that short-term rental owners are required to remit include the individual or corporate income tax and the sales and use tax. Although the sales and use tax are subject to US constitutional restrictions. You might have to report the rental income generated from short-term rentals for federal income tax purposes, however, you may deduct operating expenses of the short-term rental, which for most people is more than the rent they collect so that they won’t owe income tax but there are no deductions for lodging tax.
It is important that you check with the city, county, and state where your rental property is located as there may be a lodging tax at one or multiple levels of government. For instance, Maine has a statewide lodging tax of 9%, with no city or county taxes while California does not have a statewide lodging tax, rather, each city or county imposes its own tax.
Lodging taxes are typically 10% to 12% on average, with the rate often escalating in the resort and urban markets. High tax rates in big cities are very common, for instance, the short-term rental tax rate in Chicago is over 21%.
NOTE: You are required to pay taxes on all mandatory fees that you charge the guest as a condition of the rental. This typically covers all extra charges, such as cleaning fees, pet fees, credit card fees, etc. Refundable damage or security deposits are not taxable.
There is no national permit, license, or registration for short-term rental owners in the united states, instead, you may be required to apply for tax permits at multiple levels of government and register for other licenses such as fire, building, zoning permits, etc., at your local jurisdiction
Vermont requires registration with the various city housing division, the department of public safety, and the department of fire safety to operate a short-term rental.
It is important to check with both state and local authorities for the necessary registrations. Check your sub-national jurisdiction page on this website to access the latest information on the laws and regulations that applies to your short-term rental properties in the United States.
There are quite a number of national short-term rental associations online that you may consider joining but you are not mandated to join any of the associations, there are also local associations that collaborate with the National Association that you may join. The various websites of the national associations are;
Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.
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