Important DOR Clarification on All Overnight Rentals
November 2, 2015
 
Dear WH&LA Lodging Member:

Late Friday the Department of Revenue (DOR) included an important clarification relating to the taxation of Overnight Stays in their October DOR Tax Bullletin.

This comes at a time where overnight stays in homes, vacation properties and more are increasingly being marketed and rented through websites such as Airbnb.com, Homeaway.com, while the properties are frequently not licensed, inspected, and not paying sales and room taxes.

What is Clarified (see pages 5-6 of the Bulletin): 
  • Homeowners or other individuals who make rooms or lodging available to the public for periods less than one month, must report and pay Wisconsin sales tax on such rentals.
  • This includes the short term rental of a home, room, apartment, cabin, inn, motel, or any other building in which accommodations are made available to the public.
  • "One month" means a calendar month or 30 days, whichever is less, counting the first day of the rental and not counting the last day of rental.
  • The sales tax rate charged is based on the location where the lodging is furnished. A basic room tax, an additional room tax and a municipal room tax may also apply, depending on the location of the lodging.
    • Exception: If taxable sales are less than $1,000 in a calendar year, an occasional sale exemption may apply to the sales.

Why is this important?

  • Instead of listing just common lodging terms, the Bulletin clearly specifies that both sales and local applicable room tax apply to the renting of a:
    • Home
    • Room
    • Apartment
    • Cabin
  • The Department of Revenue has also updated their publication Hotels, Motels, and other Lodging Providers - How Do Wisconsin Sales and Use Taxes Affect Your Operations?
  • Other items of interest in this issue include:
    • On pages 2-3 "Change in Tax Treatment of Waterslides in Water Parks"
    • On pages 3-4 "Winterizing (Dewinterizing) Vacation Homes, Cabins, and RVs"
    • On page 5 "Fishing and Hunting Guide Services" under Example 5 :Guide Services and Lodging Package"

Contact: Trisha Pugal
Wisconsin Hotel & Lodging Association
pugal@wisconsinlodging.org
262/782-2851