Lodging Taxes 101: Filing tax returns on your short-term rental

Part of your lodging tax obligations as a short-term rental operator require you to file lodging tax returns with the appropriate tax authorities and pay any lodging tax that’s due.

This is the final part of the lodging tax process. Before you can file, you’ll need to figure out which jurisdictions you need to file in, get registered for a tax permit or license in those jurisdictions, and collect the correct amount of tax from your guests.

Frequency and deadlines

As part of the registration process, you’ll be assigned a filing frequency, which could be weekly, monthly, quarterly, or annually, depending on the jurisdiction.

It’s important to pay attention to your filing deadlines, as you may have to pay fines or penalties for missing them. In Tennessee, for example, the penalty for late filing is a minimum of $15, and that can grow to a fee as much as 25 percent of the tax due, depending on how late the return is filed.

In most jurisdictions, you’re required to file by the deadline even if you have no short-term rental income to report for the period.

Keep in mind that if you collect lodging tax in more than one jurisdiction, the filing frequency and deadlines can be different for each jurisdiction. Furthermore, the deadlines for online filing may be different than if you file a paper return.

Filing and payment

Filing your return can usually be done online, but systems and processes vary among jurisdictions. Some jurisdictions allow the option of filing electronically or via paper returns, but increasingly, governments are eliminating the paper option.

In order to file, you’ll need to enter information on how much you charged for your short-term rentals. You’ll also need to pay the tax amount due, usually via check or electronic transfer. Many jurisdictions allow credit card payments, but you may be charged convenience fees for this type of payment.

Some jurisdictions may offer you a discount (usually a small percentage) on the amount of taxes due if you pay earlier than your deadline. For example, South Carolina offers a discount of 3 percent of the total tax due if the amount due is less than $100, and 2 percent if the tax due is more than $100, for returns that are paid in full by the due date.

If your short-term rental platform (such as Airbnb, HomeAway, or VRBO) automatically collects lodging taxes for you when your guests book, the platform will file those tax amounts. But keep in mind that not all platforms take care of collection and filing for you, and some may collect and file for some jurisdictions where you owe lodging taxes, but not for others. Ultimately, you’re responsible for making sure you’re complying with lodging tax laws in all jurisdictions that apply to you.

If you need to file lodging tax returns on your own, the MyLodgeTax solution can do it for you, along with taking care of registrations and letting you know the correct tax rates to charge.