Several States Could Regulate and Tax Short-Term Rentals in 2015

More than a handful of state legislatures could be taking up regulating — and taxing — the short-term rental industry in 2015.

That’s the word from the Travel Technology Association, which has a membership that includes major online travel agencies such as Expedia and Orbitz, global distribution systems like Amadeus and Travelport– and HomeAway and Airbnb.

Philip Minardi, who heads public affairs for the association, says California, Hawaii, North Carolina, Rhode Island, Texas, Wisconsin and Utah are expect to take up legislation at the state level to regulate the short-term rental industry in 2015.

“Most are discussing two different, but obviously related issues,” Minardi says. “How to legalize short-term rentals, but also, as states try to squeeze out funds wherever they can, how to tax short-term rentals.”

The association has expressed opposition to the numerous lawsuits around the country filed by cities, counties and states seeking to recoup from online travel agencies what the plaintiffs view as unpaid hotel occupancy taxes.

“Fundamentally, there is no difference between a short-term or vacation rental and a longer-term apartment or other rental property so the implementation of separate tax laws or the safety and security compliance standards that currently apply to hotels is misguided,” Minardi argues.

Many municipalities and states undoubtedly don’t see it that way.

Minardi says it is “unwise” for states to be discussing taxation of short-term rentals when they haven’t even resolved how to legalize them.

Regardless of how tax laws evolve to deal with short-term rentals, it is clear that various states around the country are realizing that they have to detail with the regulatory issue sooner rather than later.