State of the state: New York short-term rental rules

In this series of blog posts, we offer an overview of the short-term rental lodging tax obligations for certain states, along with the latest rules on short-term rental operations.

New York isn’t just a state of mind; it’s a state with a lot to offer visitors, from New York City — one of the top destinations in the world — to slower-paced tourist favorites such as Niagara, the Adirondacks, the Catskills, and the Finger Lakes. Short-term rentals are popular throughout New York state, with well-established state and local taxes. However, vacation rentals have also become more controversial over the past several years, especially within New York City, and new short-term rules have become part of the landscape.

Vacation rental lodging taxes

For tax purposes, short-term rentals in New York state are defined as reservations of fewer than 90 consecutive days. New York vacation rentals are subject to state and local sales taxes and local lodging taxes.

Under state law, the rental of a bungalow, defined as a fully furnished single-family living unit with its own kitchen, bathroom, and sleeping rooms, is not subject to lodging taxes as long as no housekeeping, food services, or other common hotel amenities are provided.

Tax registration and filing

Vacation rental operators are required to register with the New York State Department of Taxation and Finance in order to receive a sales tax certificate of authority. Depending on the jurisdiction, hosts may be required to register with the local tax authority and file local lodging tax returns in addition to state registration and filing.

Tax collection by short-term rental marketplaces

Some short-term rental marketplaces have agreements with individual counties in New York state to collect lodging taxes for their hosts. However, neither Airbnb nor Vrbo currently collect taxes on behalf of their hosts in New York City. If taxes aren’t being collected for you, you’re responsible for collecting and remitting them to state tax authorities.

Local vacation rental laws

According to the New York state multiple dwelling law, short-term rentals are only allowed in most apartment buildings if the permanent tenant lives in the apartment while guests are staying there.

New York City, in particular, has taken several measures in recent years to crack down on illegal short-term rentals. While the city and short-term rental marketplaces, such as Airbnb and Vrbo, once battled fiercely in the courts over regulation, the relationship between city officials and marketplaces has become much more cooperative in recent years.

However, the city has not shied away from fighting illegal vacation rentals with actions such as suing short-term rental operators.

Starting in January 2023, New York City will require short-term rental operators to register their properties with the city and obtain short-term rental registration numbers. Vacation rental hosts must inform the city if they’re listed with any marketplaces. Violations of the new ordinance can result in fines of up to $5,000, or three times the revenue generated by the property, per violation.

Marketplaces must also register with the city, include property registration numbers in online listings, and verify registration numbers prior to processing transactions. Short-term rental marketplaces already provide some data on their listings to the city under the settlement terms of a 2018 lawsuit.

Short-term rentals in New York City are subject to the city’s hotel room occupancy tax, which is collected by the city, along with state-administered lodging taxes: state sales tax, New York City sales tax, and a Hotel Unit Fee of $1.50 per day. Short-term rental hosts must collect and pay the city occupancy tax unless the operator only rents a whole home to guests up to 14 days in a year or only once or twice in a year.

Get help with New York state vacation rental taxes

Avalara MyLodgeTax can help vacation rental hosts automate and simplify lodging tax compliance on the local and state level, including tax registration and filing. For more on vacation rental lodging taxes in New York, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.