Yes. Renting a property is considered a business. To avoid penalties, you must obtain the proper business license(s) in order to rent it out legally. Avalara MyLodgeTax will identify which licenses and permits you need. Setup takes about 30 days as we work with various tax authorities on your behalf. The cost for each license is the rental property owner’s responsibility. After that, simply sign in to our secure online application and report your rental revenues — that’s it! We file your returns, remit tax payments, and renew each license, on your behalf, for the life of the account.

It’s true that you can do this on your own without MyLodgeTax. When it comes to taxes, in general, the work involved becomes complicated, tedious, and prone to error when done manually. Much like income tax returns, people choose to pay someone else to do it for convenience, less risk, better accuracy, and to save money and time. Lodging tax compliance is no different in that way — and MyLodgeTax makes it so easy!

Yes. Short-term renting of your vacation property triggers the requirement to collect and remit lodging taxes, which go by many names across the U.S. (e.g., occupancy tax, lodging tax, room tax, accommodations tax, bed tax, hotel tax, etc.). However, lodging taxes are different from the income taxes required by the IRS and the states, which are filed once a year. Lodging taxes are paid to city, county, and/or state tax agencies each month or quarter. They play an important part in funding the infrastructure where your rental resides such as beach preservation, transportation systems, airline subsidies, snow removal, and other operating costs to support and encourage tourism. As the popularity and growth of vacation rentals increase, so does the enforcement of these taxes. Tax agencies nationwide commonly monitor vacation rental platforms in search of violators.

In some cases, you might be free from an obligation to collect and remit lodging tax, but the only way to accurately determine your lodging tax requirements is to review the specific state and local laws for the location of your property. In most cases, vacation rental marketplaces have signed agreements with the state to collect and remit all lodging taxes due, leaving vacation rental owners still responsible for collecting and remitting taxes levied by their county or city governments. Sometimes, the vacation rental marketplace will collect and remit both state and local taxes, but in some situations, the rental owner still must file regular tax returns showing their exemption from needing to collect and remit. In all cases, if you rent your property through your own website, you’re required to collect and remit those taxes yourself. 

And no matter who collects and files, the property owner must receive and maintain all business and vacation rental licenses and/or permits.

Many vacation rental owners are unaware or confused by the myriad of tax requirements. As a result, owners sometimes go months or years without paying. If you’re in this situation, there’s good news: Most state tax authorities have what’s typically called voluntary disclosure programs.  MyLodgeTax can work with you on the best solution to resolve any back tax issues.

Exemptions vary by state, and some by city and counties within a state. Non-profit groups, church/religious organizations, certain government officials, and universities are common groups that may be exempt from these taxes, but not always. Most states require the exempt organization to have an exemption certificate and pay with organization funds.

If we determine you are not required to pay and collect these taxes, we will give you a full refund of your license fee and cancel your service without any additional charges.

No. You can cancel at any time without any obligation. However, you are still obligated to collect and pay these taxes.

No. Income taxes and lodging taxes are not the same. Income taxes come out of your personal income, whereas lodging taxes are calculated off of revenue earned from renting out your home or room.

The definition of a short-term rental (and therefore taxable) varies by location. In some states, short-term rentals are defined as less than 28 days but can be as high as 185 days in other states. In most states, a 30-day rental or monthly rental is considered long-term and therefore exempt from these taxes. The bottom line is that each tax jurisdiction must be thoroughly researched to identify and understand specific rules.

These taxes are charged on the total payments (money or value) received from the renter, including rent, cleaning fees, and any other mandatory fees such as a booking fee, extra person charge, pet fee, etc. Refundable deposits are not taxable.