Colorado Springs, CO · Member since 2017 · 34 posts · 5 votes
Can someone help me translate this? VRBO is telling me on their website as I write my listing that in Destin, FL:
11% tax collected from guests
3-4 local, county, and/or state registrations/licenses
24 returns per year (remitted monthly)
1-2 secretary of state registrations (optional)
185 consecutive nights stay or less are taxable
What does this mean exactly?
-- I understand collecting 11% tax from guests
-- 3-4 registrations/licenses, do I have to register with these entities or does it happen through the closing process?
-- 1-2 secretary of state registrations? Is this to register a business (i.e. LLC)? Why would 2 be required?
-- Are they saying the 11% tax applies to anyone staying less than 185 nights?
-- 24 returns per year? Why so many?? That is twice monthly. Is that to remit the 11%? sales tax?
Help!! What do y'all do for the process? Do you hire a service like Avalara (the service that provides the above information on VRBO)? I would appreciate feedback, ugh!
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
8y
You may be required to register with local entities such as your city or county that may regulate short-term stays. You are required to collect sales tax on any rental that is less than 6 months and 1 day. You are also going to be required to collect a tax for vacation rentals such as what motels or hotels collect. You need to contact the State of Florida Department of Revenue to register as a business for tax collection purposes. There may be other items that I am not familiar with because I am not involved in VRBO or short-term rentals.
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
8y
You may be required to register with local entities such as your city or county that may regulate short-term stays. You are required to collect sales tax on any rental that is less than 6 months and 1 day. You are also going to be required to collect a tax for vacation rentals such as what motels or hotels collect. You need to contact the State of Florida Department of Revenue to register as a business for tax collection purposes. There may be other items that I am not familiar with because I am not involved in VRBO or short-term rentals.
Property Manager · Aurora, CO · Member since 2014 · 221 posts · 210 votes
8y
Hi Cristy,
I have a property in Fort Walton Beach FL, which is in Okaloosa County, the same as Destin, FL. I use Avalara to manage my licenses and pay the taxes for me each month. I pay taxes to:
6% State of Florida (Sales Tax) $50/year
5% Tourist Development Tax (Okaloosa County Tourist Development District) $17.50/year
This is why there are 24 returns per year: 2 returns filed per month (one for the state and one for the county.)
We also have to pay a Florida Resort Dwelling application fee each year ($90/year).
You have to register with each entity...it does not happen during closing on the purchase of the property. If you use Avalara, they register for your licenses on your behalf with each entity. Their fee is $20/month to make sure you secure all of the proper licenses and report and pay the taxes each month based on the figures that you report to Avalara each month.
I started using Avalara when we bought our first STR because I was pretty overwhelmed with everything in the beginning and the taxes were one thing I wanted to be sure we got right. If this is your first STR I would recommend using their service.
The last STR property we bought was in VA and for that one I decided to investigate how I could report the taxes myself instead of using Avalara. It turned out to be pretty simple....I just applied to the State of VA Dept of Revenue online for a license ($50) and I file electronically once a month. We also had to apply for a Special Use permit in the county where the house is located, but when it was approved I was given a license from the county. I mail a report & check to them each month.
Colorado Springs, CO · Member since 2017 · 34 posts · 5 votes
8y
Valerie, thank you so much for this great info! I see you are from Aurora, we are from Colorado Springs! This is all new to us but exciting. Do you have your own property management company? I am wanting to possibly work part-time in the field in addition to my other job just so I can learn more.
Real Estate Broker · Santa Rosa Beach, FL · Member since 2009 · 44 posts · 21 votes
8y
There are two ways to make payment. One to the state of Florida that pays the state tax and the sales and use tax for okaloosa county. Then okaloosa county has a site for to remit the remaining taxes. It’s easy. You enter the collected rent and they’ll do the calculating for you
Real Estate Investor / Realtor · Miami, FL · Member since 2017 · 125 posts · 67 votes
8y
When I had properties on short term rentals I hired Avalara and they got me the licenses I needed and did the monthly pay. You just have to report on their website. I thought it was worth it.
Melbourne Beach, FL · Member since 2017 · 16 posts · 9 votes
8y
@Cristy George in Florida you also should be registered as a vacation rental dwelling with the Florida Department of Professional Regulation. No use paying tax to Tallahassee and getting dinged for not having a license!
Valerie, thank you so much for this great info! I see you are from Aurora, we are from Colorado Springs! This is all new to us but exciting. Do you have your own property management company? I am wanting to possibly work part-time in the field in addition to my other job just so I can learn more.
Hi Cristy,
I didn't realize you asked me this question four months ago since my name was not 'tagged' so I apologize that I did not respond before now.
To answer your question I do manage the bookings for my own vacation rental properties. I also have a booking & marketing service that helps other owners of vacation rental properties manage the bookings for their rentals.
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
8y
We found it almost impossible to make money in Destin unless you’re talking about paying cash for a million dollar home with water access. Let us know your plan!
As far as taxes just let Avalara do it and save yourself the time.
Note: if you ever convert to long term leases of 6 months and one day or longer no taxes due to State of FL.
I don't own an STR but is it that because you are making 2 filings per month and paying taxes each time that once you switch to a long term lease of 6 months+ you no longer continue these filings?
Or are there state taxes you would have paid at the end of the year for an STR but because you switched to a long term lease, you would not owe those taxes?
In a situation where you short term rent for say the summer but then long term rent for the rest of the year, how does the income get reported for federal taxes on a Schedule E? Is the house just classified as a long term rental for taxes purposes despite the mixed use?