Yes. Renting property is considered a business. To avoid penalties, you must obtain the proper business license(s) to rent it out legally. Avalara MyLodgeTax will identify which licenses and permits you need. Setup time varies as we coordinate with the appropriate 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). 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 is located 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.

Exemptions vary by state, and some by city and county 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.

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