Short-term rental tax compliance, explained.
If you rent a place by the night, your city or county almost certainly wants a cut — a lodging tax, also called a transient-occupancy tax (TOT). Here's what that actually means, why your booking platform usually doesn't handle all of it, and how to stay on the right side of it.
What is lodging tax?
Lodging tax is a tax on the price of a short stay — the same idea as the "hotel tax" on a hotel bill. It's charged to your guest and collected by you, then paid to the government. Rates and names vary by place (transient-occupancy tax, room tax, accommodations tax, lodging tax), and a single stay can carry several layers at once — state, county, and city. Combined rates commonly land somewhere in the low-to-mid teens of a percent of the nightly total.
Two jobs: register, then remit
Register
A one-time (often annually renewed) step: get a short-term-rental permit and/or a tax account number from your city or county. Some places also require a business license or a posted permit number on your listing.
Remit
The recurring step: file a return and pay the tax you collected from guests, on a set schedule — frequently monthly or quarterly. You file even in months with no bookings in many jurisdictions.
The catch most hosts miss: your booking platform doesn't always do this for you. Airbnb and Vrbo collect and remit some state and local taxes in some jurisdictions — but not every city and county tax, and not everywhere. Where they don't, registration and remittance are still your job. Always confirm exactly which taxes your platform covers in your specific market.
The compliance gap is real
Short-term rentals grew faster than the rules around them. In some cities, as many as 75% of short-term rentals are out of compliance, against a U.S. short-term-rental market worth around $30 billion. A single audit in Hudson, New York turned up dozens of properties out of compliance — roughly $30,000 a year each in uncollected tax.
For a host, the takeaway isn't fear — it's that cities are getting much better at finding non-compliant rentals, so getting it right up front is cheaper than getting caught later.
A host's compliance checklist
- Find your jurisdiction's rules — does your city/county require an STR permit, and is your property type allowed?
- Register for the permit and a lodging-tax account before you take bookings.
- Find your combined lodging-tax rate and confirm which layers your platform already collects.
- Collect the right rate on every stay, and file + remit on schedule — even in zero-booking periods if required.
- Keep records: booking totals, tax collected, and returns filed.
See where you stand
cohost surfaces the permit requirement, the lodging-tax rate, and the local rules for your market — with sources you can verify. Your compliance score per listing is free; a per-property check for any address is a Silver feature.
Often, yes — at least partly. Platforms collect and remit some state or local taxes in some jurisdictions, but not every city and county tax, and not everywhere. Where they don't, registration and remittance are still your job. Confirm exactly which taxes your platform covers in your market.
Registration is the up-front step: get a permit and/or a tax account number from your city or county. Remittance is the recurring step: file a return and pay the tax you collected, on a set schedule (often monthly or quarterly). You generally do both.
Back taxes plus penalties and interest, and in some places fines or loss of your permit. Enforcement is increasing as cities adopt monitoring and audit tools.
Start with your city or county finance/clerk office, or use a per-market guide. cohost surfaces the permit requirement, the lodging-tax rate, and the local rules for covered markets — each with a source.
Statistics cited from LocalGov, “Local Government Short-Term Rental Host Tax Compliance,” localgov.org. This guide is general information, not tax or legal advice — confirm the rules and rates that apply to your specific property with your local jurisdiction. Last reviewed 2026-06-18.