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Up to Discussions in Taxes and Legal
9998 Views 29 Replies Latest reply: Apr 17, 2013 3:12 PM by hotspottax RSS
margaret Contributor
margaret
43 posts since
Apr 27, 2011
Currently Being Moderated

Jul 14, 2011 4:18 PM

How do I handle tax for my rental

I am an owner of a condo in Pawleys Island South Carolina. I have some questions about tax: Do I charge the renter tax? is it 7%? Who do I pay it to? How do I pay the tax to the proper agency? I would really appreciate any help I can get, I have asked these questions to an attorney, an accountant and the dept of revenue and now have many different answers. Pawleys Island owners can you help me out. Thanx, Margaret

  • Active Contributor
    laura
    356 posts since
    Nov 18, 2010
    Currently Being Moderated
    Jul 15, 2011 11:51 AM (in response to margaret)
    How do I handle tax for my rental

    Hi Margaret,

    While you wait for other Community members to chime in, this related discussion about vacation rental taxes might be useful.

    All the best,

    Laura

  • hotspottax Contributor
    hotspottax
    36 posts since
    May 13, 2011
    Currently Being Moderated
    Jul 17, 2011 2:10 PM (in response to margaret)
    How do I handle tax for my rental

    Hi Margaret,

     

    I see this post was from late April, so you may have already figured all of this out. But if not, the total tax rate for Pawley Island is 10%, which is comprised of SC state sales and accommodations tax totaling 7.0% and a local Pawley Island accommodations tax of 3.0%.  You would need to register for an SC sales tax license and also register with Pawley Island.  Once registered then, generally, each month you will need to file one tax return with SC and one tax return directly with Pawley Island to report your rentals and remit the taxes. 

     

    Good luck renting and if you would like more information about tax compliance or our service that will handle all of these requirements for you visit www.hotspottax.com.

     

    Thanks,

    Rob Stephens

    HotSpot Tax Services

    • New Member
      mountainmomma
      13 posts since
      Aug 31, 2011
      Currently Being Moderated
      Dec 4, 2011 1:22 PM (in response to hotspottax)
      Re: How do I handle tax for my rental

      We have an interesting problem for you.  We own and live year round in a home in the mountains of North Georgia.  Our vacation rental unit is the lower level of our home.  We are totally confused about what we might need to do on the tax scene. 

      • marym Community Ambassador
        marym
        450 posts since
        Feb 10, 2011
        Currently Being Moderated
        Dec 4, 2011 2:27 PM (in response to mountainmomma)
        Re: How do I handle tax for my rental

        My first thought - see a tax professional!  I'm wondering if it's a similar situation as having an "office" in your home, i.e., you measure square footage and the percentage of the rental compared to the total of your entire home is the percentage you use to all your expenses.  Please share what information you find out!

        • New Member
          mountainmomma
          13 posts since
          Aug 31, 2011
          Currently Being Moderated
          Dec 4, 2011 4:14 PM (in response to marym)
          Re: How do I handle tax for my rental

          I've already got an e-mail query into HotSpot Tax Services and will see what they say.  Should be interesting.  I know there are other homes out there who rent one of the floors.  I investigated one myself a year or so ago.  We've been pretty casual about it and haven't collected taxes but we're still pretty new and wouldn't have that much to pay if we decided to  come forward and declare before they contact us.  We heard that our county is going to start becoming more agressive about collecting occupation taxes from our cabin rental community.  I'll be sure to keep everybody up to date on this.

          • hotspottax Contributor
            hotspottax
            36 posts since
            May 13, 2011
            Currently Being Moderated
            Dec 5, 2011 11:59 AM (in response to mountainmomma)
            Re: How do I handle tax for my rental

            Hi mountainmamma,

             

            I just sent you an email with the tax requirements for Blairsville, GA.  There is a combined 12% tax (7.0% state and county sales tax remitted to Georgia, plus a 5% local accommodations tax) that you are required to collect from your guests on the rent you charge. 

             

            Generally, the laws and codes are written very broadly to define hotels as any structure or room where accommodations are being provided for consideration.  The fact that you live there does not effect the taxability. Even if you were renting a spare bedroom in your home, that is typically subject to the hotel/occupancy taxes. To confirm you could call the city clerk in Blairsville, I would be interested if they gave you conflicting advice. 

             

            I hope that helps.

             

            Best,

             

            Rob Stephens

            www.hotspottax.com

            • New Member
              mountainmomma
              13 posts since
              Aug 31, 2011
              Currently Being Moderated
              Dec 6, 2011 9:41 AM (in response to hotspottax)
              Re: How do I handle tax for my rental

              Hi Rob,

               

              Thanks for getting back to me so quickly!  Last night I spoke with our county tax person, Susie Philips, as she's in our church choir with me.  After explaining that our rental is the lower level of our home and this year we had a total of 6 weeks rental Susie said that we shouldn't worry about asking for taxes.  However she said it might also be a good idea to talk with our county commissioner to make sure. 

               

              We're a very small community and everyone is just  trying to make a living while the economy is so crappy.  They are pretty forgiving up here but we have heard thru the grapevine that the Chamber of Commerce was pushing the commissioner to up the tax from 5% to 7% and people heard about it, complained bitterly and he decided to keep it at 5%.  We also heard from fellow cabin owners that the county were going to start going after them to start collecting taxes and paying them. 

              Currently as 2011 has been our first full year this will be the first time we are going to declare earnings to the federal govt. 

               

              Does your firm give advice as to deductions etc when filing federal?  I've dealt with Georgia sales tax office before as I owned a retail store back in the 90's.  If we decide to start down this road of creating an LLC company, all the taxes etc we need to have all the info up front.  Govt can't keep their noses out of anything we do.  No fun anymore.

               

              Trish Kane

              Pmkane@windstream.net

               

              Sent from my Verizon Wireless Device

              • hotspottax Contributor
                hotspottax
                36 posts since
                May 13, 2011
                Currently Being Moderated
                Dec 9, 2011 11:59 AM (in response to mountainmomma)
                Re: How do I handle tax for my rental

                Hi mountainmamma,

                 

                A couple of comments....

                 

                First, if you are in the city limits of Blairsville you would pay the 5% tax to the city, not Union County. 

                 

                Second, Susie Rice works for the Union County tax assessor office and deals with property taxes.  The hotel/motel tax is handled by a different department in the county, she may not be knowledgible about the specific rules.  Also, as I mention above if you are in the city limits of Blairsville the tax is paid to the city and has nothing to do with the county.  I would caution you about relying on anecdotal conversations regarding these compliance issues.  Many of our customers routinely recieve bad advice from friends or others and then end up paying the consequences with penalties and interest if they get caught.  Also, we recommend you recieve guidance in writing whenever a tax jusisdition provides you verbal information that is inconsistent with their written laws and ordinances.   

                 

                We believe non-compliance is a problem for the vacation rental industry.  We are seeing tax jurisdictions accross the U.S. struggle with trying to get the industry compliant.  Partly they are seeking additional tax revenue and partly it is a fairness issue.  Rental owners and managers that are paying the tax do not like the fact the many are not, and put pressure on officials in their community to crack down.

                 

                Finally, we do not handle income tax related matters, our expertise and business is to assist property owners and managers comply with the state, county and city room and occupancy taxes. 

                 

                Let me know if you have other questions.

                 

                Thanks,

                 

                Rob Stephens

                HotSpot Tax Services

  • Contributor
    piavian_43
    42 posts since
    Nov 3, 2011
    Currently Being Moderated
    Dec 7, 2011 5:07 PM (in response to margaret)
    Re: How do I handle tax for my rental

    Reply to Margaret

    My wife has the same problem as you except that her rentals are in Litchfield Beach. She has an appointment with a CPA tomorrow to discuss sales tax as well as if state tax is owed by non-residents... from a review of the federal return there was little and none for the most part of income left after expenses and depreciation. Would like to know what you have done as well. I assume you are in Pawleys Pier

    • hotspottax Contributor
      hotspottax
      36 posts since
      May 13, 2011
      Currently Being Moderated
      Dec 9, 2011 12:10 PM (in response to piavian_43)
      Re: How do I handle tax for my rental

      Piavian_43,

       

      As your CPA may have confirmed, there are a series of state and countly sales and accommodation taxes that you will need to collect from your guests and remit each month to SC.  Additionally, there will be a local accommodations tax, likely due to Georgetown County, depending on your location. 

       

      If you would like more specifics about the tax requirements for your location, please contact me.  We will give you the info for free so you don't have to pay a CPA.  We currently handle the sales and accommodations tax filings for hundreds and hundreds of vacation rentals in SC.

       

      Best regards,

       

       

      Rob Stephens

      HotSpot Tax Services

      www.hotspottax.com

      • marilyn Community Ambassador
        marilyn
        462 posts since
        Nov 9, 2011
        Currently Being Moderated
        Apr 18, 2012 3:52 PM (in response to hotspottax)
        Re: How do I handle tax for my rental

        Are taxes only for short term rentals less than 30 days or also payable on monthly rentals as well?

        • hotspottax Contributor
          hotspottax
          36 posts since
          May 13, 2011
          Currently Being Moderated
          Apr 18, 2012 10:57 PM (in response to marilyn)
          Re: How do I handle tax for my rental

          Hi Marilyn,

           

          Most states exempt rentals of 30 days or longer from the tax, but some are 90 days and some states are as long as six months (like Florida and Hawaii), so it depends on where your rental is located.  Simarly, some locations are required to pay the taxes only monthly and other locations are quarterly.  Again, it depends on the location of your rental and how much tax you pay.  Let me know the city and state of your rental and I can be more specific.

           

          Best,

           

          Rob Stephens

          HotSpot Tax Services

          • marilyn Community Ambassador
            marilyn
            462 posts since
            Nov 9, 2011
            Currently Being Moderated
            Apr 19, 2012 8:17 AM (in response to hotspottax)
            Re: How do I handle tax for my rental

            Hi Rob

             

            Six of my homes are in Hamptons Bays, New York 11946 and one home is in Southampton, New York 11968.

             

            Would appreaciate your response.

             

            Thank you

            Marilyn

            • hotspottax Contributor
              hotspottax
              36 posts since
              May 13, 2011
              Currently Being Moderated
              Apr 19, 2012 12:27 PM (in response to marilyn)
              Re: How do I handle tax for my rental

              Hi Marilyn,

               

              NY is complicated, but recently became less complicated.  Last month NY Taxation issued a ruling that basically exempts vacation rentals from the state and county sales tax (based on a lawsuit).  You still need to collect and remit the Suffolk County hotel motel tax, which is filed and paid quarterly to the county.  Also, in Suffolk County rentals of 30 days or longer are exempt from the tax. 

               

              For the state taxes, the length of stay had to be 90 days to be exempt, but the NY state sales tax is basically not applicable anymore.  We recently notified all of our NYS customers of this development and removed the state and county sales taxes from their accounts.  They all do need to continue filing and report the county hotel tax, but that is a much lower rate.

               

              Best,

               

              Rob Stephens

              HotSpot Tax Services

      • cmarch New Member
        cmarch
        6 posts since
        Mar 31, 2012
        Currently Being Moderated
        Jun 10, 2012 2:16 PM (in response to hotspottax)
        Re: How do I handle tax for my rental

        I currently have a property management company handle my sales taxes for me (in Kissimmee, FL). I collect a total of 13% which I believe is split between state and county??

         

        Due to a deterioration in our working relationship I am looking into handling this myself. Do I need to apply for a new account or should I be able to take over the existing account(s)? Where would I find the account numbers (assuming the management company won't tell me)? Where do I go to apply to take over this task?

         

        Thanks!

        • hotspottax Contributor
          hotspottax
          36 posts since
          May 13, 2011
          Currently Being Moderated
          Jun 10, 2012 6:52 PM (in response to cmarch)
          Re: How do I handle tax for my rental

          Hi cmarch,

           

          Yes, for the 13% tax, 7% is paid to Florida each month and 6% is paid to Osceola County each month.  If your manager was handling the taxes correctly they should have most accounts for you already set-up. 

           

          You will need/have the following:

          1)  Florida sales tax account/certificate

          2)  Osceola Tourist Development tax account

          3)  Osceola County Business Tax Receipt (license)

          4)  Florida Resort Dwelling License

           

          If you call the FL DOR they should be able to give you the sales tax number for your location (address).  They should be able to unroll that number from your managers account so you can now file on it.  Also, call the tourist tax group/tax collector at Osceola County and they can provide you with the county Tourist Tax number and your Busines Tax receipt number.  They may be able to help you with a FL DOR contact too, if needed.  Finally, you will likely need to obtain a Florida Resort Dwelling license when the one your manager has expires.

           

          Alternatively, HotSpot will handle all this for you and the monthly filings for a fee of $12 per month ($6 each tax return) plus an annual fee of $19.95.

           

          I hope that helps.

           

          Best,

           

          Rob Stephens

          HotSpot Tax Services

          • west_twinner New Member
            west_twinner
            11 posts since
            Jun 1, 2012
            Currently Being Moderated
            Jun 11, 2012 12:47 PM (in response to hotspottax)
            Re: How do I handle tax for my rental

            Hi there,  we have just started renting our our cottage in Northern Michigan.  I am guessing(hoping) we will only get about 6-8 weeks of rental this year.  We included the taxes in our rate but have no idea of what the tax implications are.  Can you give any advice.   We are in Lewiston (Albert Township) MI.  Thanks

            • hotspottax Contributor
              hotspottax
              36 posts since
              May 13, 2011
              Currently Being Moderated
              Jun 11, 2012 3:27 PM (in response to west_twinner)
              Re: How do I handle tax for my rental

              Hello,

               

              For most locations in Michigan the only applicable tax for a single unit or one vacation home is the state 6% sales/use tax, including Lewiston.  You will need to register with the Michigan Dept of Treasury for a sales/use tax account/license. Most of our MI customers are required to file quarterly with the state, plus an additional annual filing.  If you want to do this on your own either call or visit the MI Dept of Treasury website to get registered and start the filing process.

               

              If you prefer, HotSpot will file the required returns for $11 per quarter, plus a $19.95 annual fee.  I hope that info helps, let me know if you have other quesitons.

               

              Best,

               

              Rob Stephens

              HotSpot Tax Services

              • lzim New Member
                lzim
                3 posts since
                Apr 20, 2012
                Currently Being Moderated
                Mar 1, 2013 2:56 PM (in response to hotspottax)
                Re: How do I handle tax for my rental

                Mr. Stephens,

                 

                You are very knowledgeable, so I thought I would go straight to the source.  We recently purchased a condo in Myrtle Beach, SC as our vacation home and on occasion rent it out via VRBO. Are we liable for any kind of taxes?

                 

                Thank you in advance.

                • beachbumz Contributor
                  beachbumz
                  234 posts since
                  Jan 21, 2013
                  Currently Being Moderated
                  Mar 1, 2013 6:29 PM (in response to lzim)
                  Re: How do I handle tax for my rental

                  LZIM - I'm a MB homeowner who also rents out. You'll need an Horry County business license, you'll need to file SC DOR Sales Tax, plus Horry County accomodations tax. For one of the taxes, if you're in MB proper, you'll need to file an extra 1% for commerce and development. Total is 12% between the two. Mr. Stephens  appears to be very knowledgeable and you may feel more comfortable relying on his recommendations. If you need some help, feel free to email me at my profile address and I'll be glad to provide more detailed information.

                • hotspottax Contributor
                  hotspottax
                  36 posts since
                  May 13, 2011
                  Currently Being Moderated
                  Mar 2, 2013 8:30 AM (in response to lzim)
                  Re: How do I handle tax for my rental

                  Hi Izim,

                   

                  Thanks for asking, I'll try to be concise about the requirements, it's a bit complicated:

                   

                  If you are in the city limits the tax is 13%, if you are in unincorporated Horry County the tax is 12%.  We verify each location we handle the taxes, for obvious reasons.  Below are the basic requirements if your IN MB city limits:

                   

                  • 10% tax paid monthly to the SC DOR.  This is the sum of five different sales and accommodations taxes.
                  • 1.5% hospitality/accommodations tax paid monthly to MB
                  • 1.5% accommodation tax paid quarterly to Horry County

                   

                  As you can see that if you are in MB city limits the taxes are paid to three different agencies.  Also, if you are in MB city limits you need an MB city business license and you do not need an Horry County business license.  HotSpot will handle all of these filings and licenses if you prefer, once you are set-up we charge about $200 per year to do all this ($15 to $16 per month).

                   

                  If you are not in city limits then the tax is 12% and paid to SC DOR and Horry County, so you don't have to worry about anything with MB.  Also, I believe you don't need an Horry County business license unless your rentals exceed $10,000 per year.  Our fee for Horry County (not MB) is $135 per year to handle everything.

                   

                  Hopefully that helps, let me know if you have other questions.

                   

                  Best,

                   

                   

                  Rob Stephens

                  HotSpot Tax

  • goliathslw New Member
    goliathslw
    1 posts since
    Apr 4, 2013
    Currently Being Moderated
    Apr 4, 2013 4:01 PM (in response to margaret)
    Re: How do I handle tax for my rental

    Hi,

     

    If I have a home in Hunter, NY 12450 that I wish to rent out short term, what are the tax rates, and how often do I need to file?  And what is the definition of short term?

     

    Thanks

    • harry2010 New Member
      harry2010
      1 posts since
      Apr 16, 2013
      Currently Being Moderated
      Apr 16, 2013 2:19 PM (in response to goliathslw)
      Re: How do I handle tax for my rental

      Hi,

       

      I am considering short-term rental of my home in Harpers Ferry, WV and until I saw this forum, I never even thought about taxes.  Can anyone help with rules/law for West Virginia?

       

      I think of short term rental as weekend up to 1 week.

       

      Thanks

      • evan Contributor
        evan
        216 posts since
        Jan 12, 2013
        Currently Being Moderated
        Apr 16, 2013 5:18 PM (in response to harry2010)
        Re: How do I handle tax for my rental

        I believe in many states the definition of short term is up to  months were one collects taxes. I know it i in fla. i'm sure theres psters from every state on here who can guide you

      • hotspottax Contributor
        hotspottax
        36 posts since
        May 13, 2011
        Currently Being Moderated
        Apr 17, 2013 3:12 PM (in response to harry2010)
        Re: How do I handle tax for my rental

        Evan,

         

        In WV rentals of less than 30 days in duration are considered short term and subjedct to the state 6% sales tax.  There likely may be an additional local city or county tax too.  Jefferson County does have a hotel tax that may apply to your rentals.  If you register for HotSpot we will confirm the exact tax requirements for your location and then register you for any required account and licenses, then file and pay the taxes when due each month or quarter.

         

        If you want to figure this out on your own my suggestion would be to contact the WV Dept of Taxation and Jefferson County Finance or Tax Collector.


        I hope that helps.


        Best,

         

         

        Rob Stephens

        HotSpot Tax

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