Homeowners Who Provide Temporary Lodging Must Charge Tax
Air B&B 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.
Check with your local city clerk’s office to find out if you need a local business license or permit, a home occupation permit 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, which can be several hundred dollars. Requirements vary by city, including a requirement in some cities that the homeowner be on-site during the time the space is rented.
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.
Volkswagen Diesel Settlement Opportunities
Idaho received several million dollars in the 2017 Volkswagen diesel settlement. The funds will be distributed to Idaho businesses and communities to fund special projects related to clean air. Over $2 million will go to businesses located within a half mile of major highways for the implementation of electric vehicle charging stations. For information on how your business might apply visit the Electric Vehicle page on the Department of Environmental Quality (DEQ) website.
Uber Eats to Begin Collecting Sales Tax
Effective July 1, 2019 Uber Eats will begin collecting sales tax on deliveries to customers in Idaho and 14 other states with more states to follow. Restaurants will no longer need to collect the tax. For details, see Uber Eats Will Start Collecting Sales Tax. Each individual restaurant offering delivery through Uber Eats or a similar business will need to secure a state tax form ST-101, Sales Tax Resale or Exemption Certificate, or a similar document from Uber Eats. For questions, contact the Idaho State Tax Commission Tax Policy Division.
Have You Updated Your W-4?
Recent changes in the Federal tax laws may affect your withholdings. For information on the law and updating your W-4, see Update Your W-4 on the Idaho State Tax Commission’s website.