Short-term rentals and tax collection in the news

Short-term rental property owners in the Pittsburgh area recently received a letter from the Pennsylvania Department of Revenue informing them of the county and state’s 7 percent hotel occupancy tax requirement in Allegheny County, according to a recent article in the Pittsburgh Tribune. The article said these property owners have been asked to complete a questionnaire that asks how many properties they rent and how often. The state will follow up to determine if properties should be registered and how much tax might be owed.

“We’ve had this issue crop other in other areas of the state,” said Hank Lerner, Pennsylvania Association of Realtors® Director of Law and Policy. “And we want to remind Realtors® that short-term rentals are generally going to be subject to both the county and state hotel occupancy taxes.”

While sites like Airbnb, HomeAway and VRBO are new to the short-term rental industry, rental properties through these sites are still subject to the hotel occupancy tax requirements.

“These are properties advertised to the public for the purpose of providing short-term accommodations for a fee, even if the entire property isn’t rented out or it’s sometimes used by long-term residents/owners,” Lerner said. “They fit the definitions included in the language of the law and it’s meant to be broadly interpreted.”

Lerner said that this tax is intended to be passed along to the consumer, not paid for by the property owner. “When you stay at a hotel, you’ll see these taxes itemized on your receipt. Just because a property is rented through a website, doesn’t mean it’s not subject to state and local taxes,” he added.

Lerner strongly urges Realtors® who may be involved in short-term rentals to contact their accountant and/or attorney to determine exactly how to comply. Full compliance will require registration at both the state and local levels.

For state compliance, the Department of Revenue recommends:

• To collect the state’s 6 percent hotel occupancy tax, property owners in Pennsylvania must first register with the Department of Revenue for a “Sales, Use and Hotel Occupancy Tax License” by filing Form PA-100. The most efficient option is to complete the form online at state.pa.us.
• After completing the form, registering with the department and obtaining a license and account number, property owners must create a separate account with e-TIDES. The easy-to-use online system is specifically designed for business taxes. Property owners can use e-TIDES to file hotel occupancy tax returns, make payments or request extensions.
• Property owners needing assistance registering through the Online PA-100 portal should contact the Department of Revenue at 717-787-1064. Those with questions about e-TIDES should call 717-783-6277.

For compliance at the local level, contact the county treasurer.

More information about the sales, use and hotel occupancy tax is available on the Revenue Department’s website.

* Update: Since PAR Just Listed published this article, we’ve learned that the Department of Revenue has sent letters to rental property owners throughout the state.