What’s new: Short-term rental surcharge effective August 1, 2024
Act 183 of 2024 requires that operators of short-term rentals collect a new 3% surcharge on rents from short-term rentals, which is effective for rents collected on or after August 1, 2024. This surcharge is in addition to the 9% Rooms Tax and any 1% Local Option Tax already collected by the operator.
A short-term rental is defined as a furnished house, condominium, or other dwelling room or self-contained dwelling unit rented to the transient, traveling, or vacationing public for a period of fewer than 30 consecutive days and for more than 14 days per calendar year. This includes both entire units and single rooms if the rental is for a stay of less than 30 consecutive days. However, if the rental is in a hotel or other lodging establishment licensed under 18 V.S.A. Chapter 85, the 3% surcharge does not apply.
The Department will post additional information, including frequently asked questions, on this page in the coming weeks.
Remitting the surcharge
- The new short-term rental surcharge can be remitted using Form MRT- 441, Meals and Rooms Tax Return.
- Businesses remitting the short-term rental surcharge are required to file returns and pay any tax due electronically beginning with the August 2024 return, due September 25. To file and pay your taxes electronically, use the Department's online filing site, myVTax, www.myvtax.vermont.gov.
Reservations made before August 1 with payments on or after August 1
The August 1 effective date applies to the collection of rents. Operators collecting rents for short-term rentals on or after August 1, 2024, must collect the 3% surcharge. This is true even for reservations made prior to August 1, 2024 without payment. Accordingly, rents collected before August 1, 2024, are not subject to the 3% surcharge even when the stay occurs on or after August 1.
Lodging establishments versus short-term rentals
Lodging establishments like hotels, motels, and bed and breakfasts must be licensed in Vermont if the lodging business operates three or more guest rooms or units and/or if food is prepared onsite. Short-term rentals, like those available on short-term rental platform websites, do not need a lodging license if two or fewer units are offered for rent and no food is prepared for guests onsite. Please visit the Vermont Department of Health lodging establishments webpage for more information on licensing.
The 3% surcharge does not apply to a rental in a hotel or other lodging establishment licensed by the Vermont Department of Health under 18 V.S.A. Chapter 85. If the property does not need a lodging license, the 3% surcharge applies.
It is the responsibility of short-term rental platforms to collect the information from their hosts necessary to determine the correct amount of Vermont tax to collect.
Online short-term rental platforms
If you list a short-term rental on an internet rental platform, that platform is responsible under Vermont law to register with the Department of Taxes and collect the rooms tax, local option tax (if applicable), and short-term rental surcharge and remit these taxes to the Department of Taxes.
If you only rent on a platform and receive no other rents, you do not need to register for a rooms tax account or collect tax yourself. If you rent on a platform but also rent independently, you must register with the Department and collect and remit the tax for any stays booked independently off the platform. Registration is free.
Please note that short-term rental hosts, even those who rent exclusively through online platforms, are required to report any rental income on their Vermont Personal Income Tax return.
Independently operated short-term rentals
Many Vermont property owners are renting their spare rooms or other types of lodging to visitors. If you are renting a room in your home or some other form of lodging to guests, you can learn about your Vermont tax responsibilities using these resources. Relevant taxes are the Meals and Rooms Tax, Local Option Tax (if applicable), and the Short-term Rental Surcharge, all three of which are remitted using the same Form MRT- 441, Meals and Rooms Tax Return. Additionally, income earned through short-term rentals is subject to the Vermont Personal Income Tax.
The following is a noninclusive list of types of lodging rented or owned by the host which fall under the provisions of the law:
- A house or room(s) in a house
- Cabin, cottage, condominium, ski lodge
- Barn, bunkhouse, tree house, camper, tent
Meals and Rooms Tax
Vermont rooms tax applies to accommodations rentals in Vermont, whether it is a traditional hotel (or motel, bed and breakfast, etc.) or a short-term rental. Vermont law states that sleeping accommodations offered to the public for a consideration on premises operated by a private person, entity, institution, or organization are subject to the Vermont Meals and Rooms Tax if those rentals total more than 14 days in any one calendar year. Note: If you rent your room or other type of lodging to the same person for 30 or more consecutive days, the person is then considered to be a permanent resident, and different rules apply.
If you operate your rental accommodation independently, rather than using one of the online rental platforms, you are personally responsible for collecting and remitting the tax to the Department of Taxes. Go to Getting Started with Meals and Rooms Tax to learn the basics of Vermont Meals and Rooms Tax.
Local Option Tax
A 1% local option rooms tax (in addition to the 9% Vermont rooms tax and the 3% short-term rental surcharge) applies in some municipalities. Visit our Local Option Tax page for a list of towns that have enacted local option taxes. If you provide accommodation in town with a local option tax on rooms, you will need to collect an additional one percent (1%) Local Option Tax on all lodging and rentals that are subject to Vermont Meals and Rooms Tax.