If you are starting a home rental or bed and breakfast business, here are some guidelines and resources to help you start off on the right foot.
What you need to do if you are starting to rent a room or house :
- Register for a Vermont Business Tax Account and License y submitting VT form BR-400 Application for business tax account you can find this form at: http://www.state.vt.us/tax/pdf.word.excel/forms/business/BR-400.pdf. (Registration is free)
- Display your license for customers as authorization to collect tax on behalf of the State of Vermont.
- Keep clear and accurate records of all your rental income including dates of rental, names of tenants, the dollar amount charged for the rental, and tax charged and collected.
- Remit your taxes to the state - your filing frequency is based on the amount of your tax obligation and will be either monthly or quarterly as set by the state.
If you are currently renting a room or house or have in the past, you may be liable for unpaid rooms and meals taxes. Getting current with your state and local taxes will not only clear you of possible future fines but will also help the state fund the infrastructures that keep our state beautiful and our roads and facilities functioning smoothly for residents and our visiting guests.
Vermont State Law requires hosts to pay meals and rooms tax of 9% to the state if:
- You rent a house, cabin, cottage, or room for 15 or more days in any calendar year. Cleaning fees are also part of the taxable income. *Please note: If you rent your room or other type of lodging to the same person for 30 or more consecutive days, the person is then considered to be a permanent resident, and different rules apply.
- If you are providing meals for those guests and billing them separately those meals are also subject to tax.
You can find helpful state fact sheets at: http://www.state.vt.us/tax/pdf.word.excel/factsheets/Roomwithaview_Rev2015.pdf and http://www.state.vt.us/tax/pdf.word.excel/factsheets/LocalOptionTax-FS_Rev2015.pdf