You May Owe Multiple Taxes on Rentals of Fewer Than 90 Days

June 26, 2019

If you’re renting out your vacation home (or other dwelling, like an apartment or even a room), you need to be aware that the state of Georgia expects that you will collect and pay sales tax on the total amount that you charge the guest for temporary occupancy. These taxes are sometimes known by other names, like tourist tax or occupancy tax, and they often consist of several different taxes levied by your state, county, city, etc.

What Is a Short-Term Rental?

A lease or rental, according to the Georgia tax code, refers to “…any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration.” The state defines “short-term rentals” as any that last up to 90 continuous days.

But that definition could vary depending on where your rental property is located. You can find out exactly what’s required by entering the address in Avalara’s MyLodgeTax tool, located here. (Keep in mind that rates are subject to change.) You can also check with your local and state taxing agencies.

Getting Started

You may already have a sales and use tax number for the state of Georgia. If not, you’ll need one to charge sales tax on rental properties. You can do this online; it only takes about 15 minutes. Go to the Georgia Tax Center to register and sign up.

There may be other steps you should be taking in order to legally be even a short-term landlord, like business registration and permits. You also need to be aware of any local regulations that could affect your property, like zoning issues, building standards, and any rules imposed by Homeowners’ Associations (HOA).

Submitting Sales Taxes

You’ll of course have to file sales tax returns with the state and any local taxing authorities. State law requires that you file a return and pay electronically if you owe more than $500. Once you start submitting sales taxes on a given property, you’re required to file a sales tax return even when no tax is due or no sales were made.

Most likely, these reports (and their associated taxes) will be due every month, but you could be on a quarterly or even annual schedule. Your filing frequency will be assigned when you register. Be sure to keep all related records for at least three years.

Keep in mind that taxing jurisdictions sometimes perform sales tax audits, so you want to be sure you’re complying with all state and local rules and regulations. Let us know if we can be of help as you go through the initial steps related to rental property sales tax – or if you were previously unaware of this obligation.

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