Richmond, Virginia, imposes lodging tax on STRs

As of July 1, short-term rentals (STRs) in Richmond, Virginia, are subject to the same 8% lodging tax as hotels under a new law approved by the City Council. 

Richmond STR operators must collect the tax from guests and remit it to the city, unless an accommodations intermediary, including STR marketplaces such as Airbnb and Vrbo, collect the tax from the guest at the time of payment on behalf of the host.

The new tax revenues will benefit the Greater Richmond Convention Center (GRCCA), which includes Richmond and Chesterfield, Hanover, and Henrico counties. According to city officials, the new tax will generate additional revenue of more than $3.2 million.

Short-term rental hosts must also follow other operational rules according to a law passed in 2020:

• Under the ordinance, STR operators must get a permit from the city every two years. Permits are valid from January 1 of the year in which they’re obtained to December 31 of the following year, regardless of the date they’re granted. Hosts must include the permit approval number in all advertisements and listings.
• STR occupancy is limited to a maximum of two people per sleeping room, with a total maximum of five sleeping rooms. STR properties must undergo an inspection in order to get an STR permit and meet safety requirements. Events and gatherings of people other than STR guests are prohibited.

Local Virginia governments have been active in debating and passing STR regulations, including Northampton County, Amherst, and Northumberland. Both Norfolk and Virginia Beach have taken action on STRs in the past year.

In addition to local lodging taxes, short-term rentals in Richmond are also subject to state sales tax, which is administered by the Virginia Department of Taxation. STR operators are required to register with the state for lodging tax purposes. Both Richmond and the state of Virginia define a short-term rental as a stay of fewer than 90 days for tax purposes.

Revised state rules for STR lodging tax collection went into effect in October 2022. Accommodations intermediaries are now required to collect and remit all state and local lodging taxes for their listings. Accommodations intermediaries are also required to submit information on the transactions they have facilitated to tax authorities every month.

If a Virginia host conducts all of their short-term rental transactions through an intermediary, the host doesn’t need to register with the state. But if taxes aren’t being collected on their behalf, the host is responsible for collecting and remitting lodging tax and sales tax to local and state tax authorities.

MyLodgeTax can help short-term rental hosts automate and simplify lodging tax compliance at the city, county, and state levels, including tax registration and filing. For more on short-term rental lodging tax in Virginia, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.