Washington requires every short-term rental operator to hold a state business license and at least $1 million in liability insurance. Cities such as Seattle add their own licensing. Stays owe 6.5% state sales tax plus local lodging taxes.

Yes, there is a statewide definition of short-term rentals in Washington. As per Chapter 64.37 of the Revised Code of Washington (RCW), a "short-term rental" is defined as a lodging use, which is not classified as a hotel, motel, or bed and breakfast. This encompasses a dwelling unit, or a portion thereof, that is offered or provided to a guest by a short-term rental operator for a fee for fewer than thirty consecutive nights.

The definition explicitly excludes certain types of dwellings or arrangements from being classified as short-term rentals. For example, a dwelling unit that is occupied by the owner for at least six months during the calendar year and rents out fewer than three rooms at any time does not fall under this category. Similarly, a dwelling unit used by the same person for thirty or more consecutive nights, or a unit operated by a charitable organization providing temporary housing, are not considered short-term rentals under this definition.

In Washington State, a short-term rental (STR) is generally defined as a lodging option where a dwelling unit, or a part of it, is rented out for a duration of fewer than thirty consecutive nights.

In Washington State, owners of short-term rentals (STRs) are required to comply with specific tax obligations. These include collecting and remitting retail sales tax on rental charges and, depending on the location of the property, lodging and convention and trade center taxes. Additionally, short-term rental property owners must pay any Retailing Business & Operations (B&O) tax due after considering the small business B&O tax credit, if applicable. This credit is calculated automatically when you file electronically.

For rentals where guests or residents occupy the property for more than 30 days (nontransient), certain tax exemptions are available. In such cases, property owners do not need to charge and collect tax for nontransient lodging, and the income from these rentals is exempt from Business & Operations tax.

Property owners who rent out spaces for short-term accommodation, such as homes, rooms, condominiums, timeshares, cabins, camping sites, and RV sites, should ensure they are registered with the Washington Department of Revenue and understand the tax implications associated with operating a short-term rental.