In the last days of 2024, Governor Hochul signed a statewide Short-Term Rental Registry law, meant to address housing challenges, and enhance transparency in the short-term rental market. The law significantly expands the state’s sales tax base to include short-term rentals, impacting hosts and operators of short-term rentals like those shared on Airbnb and Vrbo.
Definition of a “Short-Term Rental”
The expanded definition of a “short-term rental” includes “an entire dwelling unit, or a room, group of rooms, other living or sleeping space, or any other space within a dwelling, made available for rent by guests for less than thirty (30) consecutive days, where the unit is offered for tourist or transient use by the short-term rental host of the residential unit.”
Registry Requirements for Hosts of Short-Term Rentals
Hosts of properties that meet that expanded definition will need to comply with the law’s new registry requirements, including registering their properties with a local registration system and providing information on occupancy rates, and taxes collected, and more. While specific details on these reports are still unknown, it is clear that the information will be accessible by local governments.
Sales Tax Implications for Short-Term Rentals
Booking platforms, including Airbnb and Vrbo, will also be required to send counties quarterly reports detailing property locations, occupancy nights, guest counts, and taxes collected. While the Department of State will not maintain its own registry, booking services must also provide the state with quarterly data on bookings facilitated in each county. These measures aim to provide a detailed view of the prevalence and usage of short-term rentals and their impact on local housing affordability.
Perhaps the biggest impact of this law is that short-term rental properties will now be subject to the same sales taxes as hotels. Previously exempt properties, such as bungalows and certain motel-efficiency units, may no longer qualify for those exemptions if they meet the expanded short-term rental definition in the new legislation. The legislation aims to align short-term rentals with the tax framework that applies to traditional lodging businesses.
As of now, the New York State Department of Taxation and Finance has not issued detailed guidance on implementing the law. Questions remain regarding the treatment of deposits collected for future stays and the status of historically exempt properties. Additional guidance is anticipated closer to the law’s effective date, and we will be closely monitoring all of this to support our clients.
How Hosts Can Navigate These Changes
While these changes may pose challenges, hosts can mitigate impacts by staying informed, seeking professional advice, and maintaining open communication with customers.
If you are affected by this law and need assistance navigating its complexities, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
