How Tax Compliance Can Be a Competitive Differentiator for Short-Term Rentals
Summary
Tax compliance is becoming a critical differentiator for short-term rental hosts as the market matures. The article highlights that many hosts spend significant time on tax compliance and are vulnerable to increased scrutiny. Hosts should consider investing in automated compliance tools to save time, ensure accuracy, and promote sustainable growth.
Key Insights
- •Only about one-third (34%) of STR sector respondents said they had received an audit notice in the last five years, compared to 60% of hotel operators.
- •42% of STR respondents spend between 51 and 100 hours annually on lodging tax compliance, while nearly one-quarter (23%) devote 101 to 200 hours per year.
- •Nearly half (45%) of STR respondents feel only “somewhat prepared” to adapt to new or updated tax requirements, signaling growing vulnerability as enforcement accelerates.
Action Items
- ✓Invest in modern, automated compliance tools.Effort: mediumImpact: high
Tools & Resources
- →Checked In, Taxed Out: Benchmarking Tax Compliance in the U.S. Lodging Industry: A new report from Avalara, “Checked In, Taxed Out: Benchmarking Tax Compliance in the U.S. Lodging Industry”
Common Mistakes
- ⚠STR operators who continue to rely on manual processes risk falling behind — not just on compliance, but on operational efficiency and scalability.
More from Regulations & Compliance
Carson City, Nevada, is refining its short-term rental regulations. City supervisors are currently reviewing and modifying the local ordinance during a retreat. This review aims to address operational aspects, potentially impacting local hosts through new or revised rules, emphasizing compliance.
A 21-unit vacation rental in Dunedin, Florida, has been approved, signaling potential growth in the local short-term rental market. This approval could lead to increased accommodation options for tourists visiting the area. This news could also influence local regulations.
St. Louis aldermen have approved a short-term rental fee, though a legal battle over existing rules continues. This indicates a focus on regulating the STR market within the city. Hosts in St. Louis should be aware of these new fees, which may impact their profitability. Find out how this affects your STR business.
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