Short-Term Rental Tax Policy

NOTE: Prior to task force meetings, ALEC posts these legislative member-submitted draft model policies to our website. The draft model policies are then discussed, debated, and voted on by ALEC task force members. Policies that receive final approval by legislators on the ALEC Board of Directors become official ALEC model policy. Draft model policies that fail to become official ALEC model policy are removed from the website.

Summary

This policy is submitted to offer revisions to the current ACCE model policy adopted in 2016. Its focus is on the taxation aspect of the short term or casual rental industry and is intended to complement any ALEC model policy.

Short-Term Rental Tax Policy

Definitions:

“Booking service” mean a person or entity who, directly or indirectly:

(a) provides one or more online, computer or application-based platforms that individually or collectively can be used to:

(i) list or advertise offers for short-term rentals, and

(ii) either accept such offers, or reserve or pay for such rentals; and

(b) charges, collects, or receives a fee for the use of such a platform or for provision of any service in connection with a short-term rental.

“Short-term rental” means an entire dwelling unit, or a room, group of rooms, other living or sleeping space, or any other space within a dwelling, made available for rent by guests for less than thirty consecutive days, where the unit is offered for tourist or transient use by the short-term rental host.

“Short-term rental host” means a person or entity in valid legal possession of a short-term rental unit who rents such unit to guests.

Tax Compliance

Short-term rentals are subject to all state, county, and municipal hotel and lodging taxes.

The short-term rental host shall be responsible for collecting and remitting all taxes, however nothing shall prevent a booking service from collecting and remitting all taxes on behalf of the short-term rental host.

Nothing shall prevent a state, county, or municipality from requiring a short-term rental host to obtain a business permit to operate the short-term rental.