The West Virginia Tax Department released a public document with the intent to clear the air about who is required to pay which taxes on rental properties.
“With the popularity of the Airbnbs, there’s some confusion of who pays what, and this document is supposed to clarify that,” Tucker County Commission President Diane Hinkle said.
The document, “Sales and Use Tax for Lodging Rentals,” is directed at short-term rentals, which are especially prevalent in areas with high tourism like Tucker County. Short-term renters must collect state sales tax, applicable municipal sales tax, and hotel/motel tax.
Persons who lease or rent out real estate or provide lodging to others are engaging in a business. Thus, these businesses must register with the state tax department and obtain a business registration certificate.
Anyone who rents lodging, whether they operate as an individual, partnership, or corporation must register as a business.
The document lists types of lodging that are considered businesses. Less common lodging types such as boarding houses, cabins, campgrounds, hostels, and YMCA-YWCAs are all listed. Even at the bottom of the list, the document reads, “This list is not exhaustive.”
Renting rooms or apartments as a permanent place of residence do not collect the state and municipal sales taxes or hotel/motel tax on such rentals.
To register with Tucker County, contact the county assessor’s office. The assessor collects the names of renters that qualify under the hotel/motel tax.
After the list is compiled, the county sheriff’s office is required to collect the six percent tax. This tax is separate from the cost of the rental.
Failure to file these taxes is criminal, because they are statutorily created. County Prosecuting Attorney Ray LaMora’s job is to prosecute if someone fails to submit their hotel/motel tax payments. “Something I like to do preemptively is to educate people so we don’t face this problem,” LaMora said.
LaMora advised renters to contact the assessor’s office if you have a question whether or not to submit the hotel/motel tax.