New York state law gives counties tools to track and tax short-term rentals

New York state law gives counties tools to track and tax short-term rentals

New York Governor Kathy Hochul has signed a law that creates more transparency on short-term rental (STR) operations within the state and makes it easier for counties to regulate and collect lodging taxes from STRs. The law goes into effect April 21, 2025.

Originally, the bill would have established a statewide STR registry, but Hochul said it would have “imposed significant unbudgeted costs” on the state. In exchange for Hochul’s signature, the state Legislature has agreed to amend the bill in January to allow counties to develop their own STR registries, but it won’t mandate county registries or create a statewide registry.

The measure does require STR marketplaces such as Airbnb and Vrbo to submit a report to the state on the number of bookings it facilitates in each county. This will give both the state and counties a better idea of where and how STRs are operating.

When counties take the option to set up their own STR registries, marketplaces must submit detailed quarterly reports to the county that include rental locations, occupancy nights, guest counts, and taxes collected.

The law defines a short-term rental as “an entire dwelling unit, or a room, group of rooms, other living or sleeping space, or any other space within a dwelling, made available for rent by guests for less than thirty consecutive days, where the unit is offered for tourist or transient use by the short-term rental host of the residential unit.”

Many local governments impose lodging taxes on accommodations. These taxes are paid by guests but collected and remitted to tax authorities by the accommodations operator. The new state law requires STRs to collect the same local lodging taxes as hotels. This is already mandated in some jurisdictions, but not in all. For example, in early 2024, Erie County started requiring STR guests to pay the same occupancy tax as guests of hotels and motels with 30 rooms or less.

STR operators in New York state are also required to comply with state tax requirements. Operators must register with the New York State Department of Taxation and Finance and collect and file state lodging taxes, including sales tax and special fees and taxes that apply to certain local jurisdictions.

Currently, the major marketplaces only collect lodging taxes from bookings in counties where they have collection agreements. But they often send tax revenues without information on bookings, so counties don’t always know if the correct amount of taxes are coming in. Counties also have no visibility into how many STRs operate within their jurisdictions unless they have already mandated STR registration. Jurisdictions in New York state have missed out on up to $550 million in uncollected lodging tax revenue over the past five years.

Airbnb has tax collection agreements with 37 New York counties and Vrbo has an agreement with one county.

When STR operators don’t have lodging taxes collected on their behalf, they’re responsible for tax compliance — including registration, collection, and filing — with state and local tax authorities.

Avalara MyLodgeTax can help New York vacation rental hosts automate and simplify lodging tax compliance. For more on short-term rental taxes in New York, see our 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.