Short-Term Rental Property Taxes in North Carolina - Discussed by a Charlotte CPA
Whether you use Airbnb, Vrbo, or HomeAway or find guests on your own, if you provide vacation rental property or short-term rental property in North Carolina, you need to pay lodging tax on those rentals in addition to any personal or business income taxes you may also be required to pay. Failure to meet your short-term rental property tax obligations in North Carolina could lead to fines and interest charges. And given the greater scrutiny applied to short-term rentals under the newly burgeoning "sharing economy," it's never been more critical to get it right.
Scott Boyar, a top Charlotte accountant, outlines questions regarding short-term rentals in North Carolina and how to properly oversee them as a property manager/owner. If you ever have any questions regarding financial & tax information surrounding a rental property, reach out to a small business tax advisor to go over everything before you begin renting your property.
Common questions regarding short-term rentals in North Carolina:
What Qualifies as a Short-term Rental in North Carolina?
Any rental property in North Carolina with reservations lasting fewer than 90 days is classified as a short-term rental. Any short-term renter who collects payments from guests renting a room at least 15 days in a year is required to collect, file, and remit short-term rental property taxes.
How to Register to Pay Short-term Rental Property Taxes
To pay short-term rental taxes, you must first register with the North Carolina Department of Revenue. You can do this by mail or online, after which a unique sales tax number will be issued to you along with instructions for filing your short-term rental property taxes.
What Short-term Rental Property Taxes Apply in North Carolina?
As a short-term rental property owner, you must pay the following taxes:
- State sales tax - To the NC Department of Revenue
- Local sales tax - Also to the NC Department of Revenue
- Local occupancy tax - Local tax authority
So if you own short-term rental property in Charlotte, for example, then you must pay local occupancy (or lodging) tax to the Mecklenburg County of the Tax Collector.
How Much is the Local Occupancy Tax?
The local occupancy tax on short-term rentals in North Carolina is a percentage of your guest's cost for the stay, adding to the total bill. The exact tax rate is dependent on the specific location of your rental property within North Carolina. Like most sales taxes, you, as the renter, would collect the tax from your short-term tenants, but you would then be responsible for paying it to the proper authority.
How to Collect and Pay Short-term Rental Property Taxes in North Carolina
The best way to meet your short-term rental tax obligations in North Carolina is to enlist an expert tax advisor in Charlotte. Scott Boyar, CPA is one such tax accountant Charlotte short-term rental property owners can trust to help them navigate Charlotte city's intricacies, Mecklenburg County and North Carolina state taxes so you can get on with the more important business of hosting your guests.