Escape from your vacation rental sales taxes

Report your revenue & we do the rest

Starting as low as $7 per tax return

HotSpot Tax

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How it Works

 Sign Up

Give us some basic info & we tell you your vacation rental tax requirements & get you licensed

 Book Guests

Continue booking guests as usual, ensuring you charge & collect the required taxes

Report Revenue

When we remind you, report your rental revenue for the period - we file your tax returns

 Enjoy Freedom

Spend more time on booking your vacation rental & keeping your guests happy

We manage the complexity of your tax requirements so you don't have to.

  • Determine your vacation rental taxes & reporting requirements
  • Inform you of the ever changing tax rules
  • Apply for your required rental & business licenses
  • Manage your license renewals for the life of your service
  • Send you reminders when it's time to report your rental revenue
  • Calculate your taxes, file your returns & pay amounts due
  • Handle all notices & correspondence with the tax agencies
  • Guarantee tax rates, licenses & returns are accurate & timely

What it costs.

No contracts. No commitments.
Pay as you go. Cancel any time.

Frequently Asked Questions

Do I really have to collect and pay sales & occupancy taxes?

Most times the answer is yes. There are only a handful of states that exempt vacation rentals.

Vacation rentals usually pay the same tax as a hotel. Short term renting of your vacation property triggers the requirement to collect and remit taxes. These taxes (known by many names: sales tax, occupancy tax, lodging tax, room tax, accommodations tax, bed tax, hotel tax, etc.) are different from the income taxes required by the IRS and states which are filed once a year. These taxes are paid to city, county and state tax agencies each month and quarter. They play an important part in funding the local infrastructure where your rental resides such as tourism promotion, beach preservation, transportation system, airline subsidies, snow removal and other operating costs to support tourist visitation.

As the popularity and growth of vacation rentals has risen, so has the enforcement of these taxes. Tax agencies nationwide are commonly monitoring vacation rental sites in search of violators.

What happens if I don't collect and pay these taxes?

While the guest pays these taxes, you as the owner or manager of the vacation rental are liable for them. If you did not collect the tax from your guest, you are still responsible for the taxes.

A tax collector may assess years of back taxes on a vacation rental. The average vacation rental owes several thousand dollars of taxes each year so the unpaid liabilities can accumulate and become significant over just a few years. In addition to the unpaid tax due, you will also owe penalties and interest, which can be significant. Penalties are often 25% to 50% of the tax due.

Given that guests are responsible for paying these taxes, your competitors are obligated to collect them as well and you face steep penalities for not complying, the clear choice is to comply.

Can you help me with my specific type of tax? I don't see it listed on your site.

Yes! These taxes are known by many different names and we provide expertise with them all: sales tax, occupancy tax, lodging tax, accommodations tax, bed tax, hotel tax, etc.

Are these taxes the same as income tax?

No. Sales tax, occupancy tax, lodging tax, room tax, accommodations tax, bed tax, hotel tax, etc. are different from the income tax required by the IRS and states. Unlike income taxes, these taxes are paid by your guests - not you. You as the owner or manager of the vacation rental are responsible for paying the taxes collected from your guests.

What if I'm already renting but haven't been collecting and paying these taxes?

Many vacation rental owners are unaware or confused by the myriad of tax requirements. As a result, owners sometimes go months or years without paying the required taxes. If you are in this situation there are a number of ways to get caught up and mitigate your liabilities. A common mistake people make is to further delay or put off becoming compliant because they are concerned about past non-compliance.

The good news is that most agencies have programs for exactly this issue - typically called voluntary disclosure programs. These agencies are motivated to get you complying and collecting these taxes. The programs allow you to pay your back tax liability and have most of the penalties waived.

HotSpot can work with you on the best solution to resolve your back tax issues and try to mitigate penalties and interest. We will also file late or amended returns on your behalf. We charge $150 per agency to administer a formal back tax or voluntary disclosure case. Alternatively, we can file late or amended returns to get you caught up (and request penalty waivers when appropriate). We charge $25 per return for late or amended returns.

Why would I pay HotSpot when I can do this myself?

It's true, you can do this on your own without HotSpot. You can also wash your dishes by hand, mow your own lawn, make your own coffee or do your own income tax return. However, many times we choose to pay someone else to do these and other things because it affords convenience, eliminates a hassle, ensures it gets done right, costs less or creates time to focus on more important things.

These tax and licensing requirements can be confusing and often times are hard to even find. Multiple agencies may be involved: city, county & state, plus tourism development authorities. In most cases that means more than one tax applies.

It's easy you say, I'll just do what other rentals in my area are doing. Unfortunately, tax boundaries aren't always clear cut and don't follow other logical boundaries. So your requirements might be different than the rental right next door.

HotSpot eliminates these uncertainties and provides all the benefits listed above. If you have any doubt, give us a try. You can cancel at any time without any obligations.

What if I sign up and I'm not required to collect and pay these taxes?

If we determine you are not required to pay and collect these taxes, we will give you a full refund of your license fee and cancel your service without any additional charges.

Are there any fees or penalities if I decide to cancel?

No. You can cancel at any time without any obligations to us. You are still obligated to collect and pay these taxes, however.

What is considered a short-term rental?

The definition of a short term rental (and therefore taxable) varies by location. In some states short-term rentals are defined as less than 28 days and in other states as much as 185 days. In most states a 30 day rental or monthly rental is considered long term and therefore exempt from these taxes. The bottom-line is you need to research each tax jurisdiction for specific rules.

What charges and fees are taxable?

These taxes are charged on total consideration (money or value) received from the renter, including rent, cleaning fees and any other mandatory fees such as a booking fee, extra person charge, pet fee, etc. Refundable deposits are not taxable.

Are there any deductions to these taxes?

No. These taxes are applied on gross revenue or gross receipts and there are no deductions for any expenses.

Are there any exemptions to these taxes?

Exemptions vary by state and some by city and counties within a state. Non-profit groups, church/religious organizations, certain government officials and universities are common groups that may be exempt from these taxes, but not always. Most states require the exempt organization to have an exemption certificate and pay with organization funds.

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