It's crucial to align this decision with the nature of your income sources and their respective tax treatments.

Domicile: WA State (income tax free)Property location (Texas): (income tax free)LT gains + Depreciation recapture ~ $300k on a $500k income property ~effective / average tax rate = 12% for past umpteen yrs (relatively low income, avoiding IRMAA and doing Roth rolls (no 'realized' income, just transferring from tIRA to Roth = vast majority of annual MAGI income)In the end (coming soon, ~17 yrs) ALL remaining estate will go to charities / Charitable Foundation / DAF.

This strategy, if combo with REPS (real estate profession status) basically checkbox on your taxes is key to canceling out full-time W2 employment.If this is new to you... 

If so, would this still cause issue with the S-Corp tax rules?

The slightly confusing part is the Business License Tax Certificate.

Is there anything different in terms of STR tax loophole if I do STR by the rooms?

Your projected pro forma will use your updated costs (such as increases in property insurance and taxes, upcoming repairs) and income (increased rents or added income streams).

I may want to do a cost segregation study and look into tax benefits.

My goal is to create a scalable entity structure that balances general risk and tax liabilities. 

When you guys are filing property tax amounts for rental properties, what figures do you use?