AirBnB, VRBO and similar websites have made it easy for homeowners to rent a room, cabin or another temporary lodging to the public. However, a homeowner cannot just open their doors without first registering as a business with the Idaho Secretary of State’s office and securing required state and local permits. See short-term rentals on the Idaho State Tax Commission’s website for information on properly establishing a temporary lodging facility. The IRS website contains Federal tax reporting information for temporary rentals. Short term rentals must collect sales tax, lodging tax and more. If a lodger remains more than 30 continuous days in the same room or space, taxes do not apply.
As of January 1, 2018 short-term rental marketplaces (AirBnB, VRBO, etc.) are required to register with the state and collect applicable taxes. If the marketplace fails to register or the property owner doesn’t use a marketplace, the property owner is responsible for collecting and remitting taxes.
Local Option Lodging Taxes – Some cities, such as Sandpoint and Kellogg, impose a local option lodging tax in addition to state lodging taxes. Contact your local city clerk’s office to learn about your local requirements.
Limitations – Homeowners may not rent space in an RV, travel trailer or similar structure not designed for permanent habitation, nor can they allow someone to park and live in an RV or travel trailer on their property and collect rent for the space.
Local Requirements – Check with your local city clerk’s office to find out if you need a local business license or permit, a home occupation permit, fire inspection or something more. Some cities impose additional requirements, including such things as proof of adequate parking and proof of an emergency evacuation plan. There may be an annual license fee. Requirements vary by city, including a requirement in some cities that the homeowner be on-site during the time the space is rented.
Insurance – Be sure you have adequate insurance to cover your facility. A homeowners insurance policy may not be adequate.
Storage Space Rental – Homeowners who rent storage space at their home for items such as RVs or boats are considered business owners and must register a business name with the Idaho Secretary of State and collect any applicable taxes.
