Small Town listing with local lodging tax

Amanda805
Level 1
Minnesota, United States

Small Town listing with local lodging tax

My question is in regards to being the first person in my small town of 8,000 to list my home on Airbnb. I decided to list after spending time in the hospital with my mom in a nearby (larger) city who's nurses where all travel nurses coming from afar. In our town we have a small University, a hospital and clinic, another clinic and multiple large industries. We also have a local Convention & Visitors Bureau, 3 hotels and 1 motel. When listing, I wanted to appeal to these longer stay guests as I mentioned above, and had a lot of learning to do (didn't turn off automatic bookings), but I thought at most I would get a couple inquiries over the course of a year. I've only had it listed for a less than a month and it's been far more substantial than that. I've spoke to city inspector and finance person, have been inspected and paid my rental fees and increased my insurance for short term rentals. I know we have a local lodging tax that I have to pay on anything less than 30 days and my main question is how to you pay that you your city as an individual and not a lodging facility??

 

I have asked an attorney about settin up an LLC which she has instructed me to do so for many reasons, but it is still my home which makes me wonder if I have to (I then have to transfer the home to the business name). 

 

I could be wrong but I feel hosting in a small community is a bit more complex because of the closeness of the town. I don't intend to compete with our hotels, just want to offer another option for people to visit our town for longer stays who may not stay in our small town otherwise. Has anyone else had to pay their local lodging tax with their individual name or have you started an LLC?

1 Reply 1

Simply put, yes. We use a part of our home with a separate entrance as a short term rental and have to pay TOT (transient occupancy tax) to our city using the business tax account we set up for a small apartment building. Our names are used as we had no ficticious business name. The city told us to add our home address to this account, so anything not rented through Airbnb (we list with other sites that do not pay) we pay on that account. I'm happy that you have a short term rental rider on your home insurance, as the minute you rent it out for short terms, you have changed it into a business and homeowners insurance will not cover any guest caused damage.