Lawmakers Impose New Taxes On Short Term Rental Owners

Hoosiers who rent out their homes through platforms such as Airbnb will now have to pay sales and innkeeper’s taxes to the state.

Lawmakers regulated short-term rentals in 2018, but left taxing issues alone until this year. And a bill to tax those rentals stalled until its language was put into the new two-year state budget.

Rep. Matt Lehman (R-Berne), who’s helped lead the General Assembly’s work on the issue, says owners only owe sales and innkeepers taxes if they rent out their property for more than 14 days a year.

“You know, maybe there’s a week that there’s an event and you rent your house out for a couple of days – the whole tax mechanism would have been very difficult, I think, to collect,” Lehman says.

Some sites, like Airbnb, collect the taxes for rental owners. But for those that don’t, the individual owners are responsible for sending the money to the state.