Short-Term Rental Taxes by City: The Complete 2026 Guide

Among all the compliance requirements for Airbnb hosts, taxes might be the most expensive—but also the most misunderstood. Many hosts underestimate their tax obligations, miss filing deadlines, or fail to track income properly, resulting in penalties and back-tax bills that can exceed $10,000–$50,000.

The good news: if you understand your obligations upfront and file correctly, you can minimize tax burden and avoid penalties entirely.

The Two Types of STR Taxes You Need to Know

Tax Type 1: Tourism Occupation Tax (TOT) / Hotel Occupancy Tax (HOT)

This is the "room tax" that guests pay on bookings. You, as the host, are responsible for collecting it from guests and remitting it to the city. It's calculated as a percentage of the nightly rate and varies dramatically by location.

Who collects it? Airbnb and VRBO collect TOT/HOT on most bookings and remit it directly to cities. However, you're still liable if they don't, so verify.

What if the platform doesn't collect? Some jurisdictions haven't established collection agreements with platforms. In those cases, you must file and pay TOT/HOT yourself—quarterly or monthly depending on the city.

Tax Type 2: Income Tax on STR Earnings

This is federal and state income tax on your net STR income (after deducting expenses). You owe this to the IRS and your state tax authority, not the local city.

Key point: You can deduct business expenses (mortgage interest, utilities, property management, repairs, insurance, etc.) to reduce taxable income.

STR Tax Rates by City (2026)

City	TOT/HOT Rate	Filing Frequency	Collected by Platform?	State Income Tax
Los Angeles	14%	Monthly	Yes (Airbnb/VRBO)	9.3% (CA)
San Francisco	14%	Monthly	Yes	9.3% (CA)
Denver	10.25%	Monthly	Yes	5.55% (CO)
Seattle	14.5%	Monthly	Yes	None (WA)
Austin	15%	Monthly	Yes	None (TX)
San Diego	12.5%	Monthly	Yes	9.3% (CA)
Miami	13%	Monthly	Yes	None (FL)
Portland	11.5%	Monthly	Yes	9.9% (OR)
Washington DC	14.5%	Monthly	Yes	8.75% (DC)
New York City	14.75%	Monthly	Yes	10.9% (NY)

How Much TOT/HOT Will You Actually Pay?

Here's a real-world example to illustrate the tax burden:

Example: LA Host, Entire Home, $150/night

Monthly bookings: 20 nights
Monthly gross revenue: $150 × 20 = $3,000
TOT collected by Airbnb: $3,000 × 14% = $420
Guest effectively pays: $3,000 + $420 = $3,420
Your net (before other costs): $3,000

In this scenario, Airbnb collects the TOT and remits it to LA. You don't handle the transaction directly, but understand: the tax is built into what guests pay.

If you were in Austin instead (15% rate), that same $3,000 in bookings would collect $450 in tax. Over a year, that's $5,400 extra per $3,000/month in revenue.

What if Airbnb/VRBO Doesn't Collect TOT in Your City?

Some smaller cities don't have collection agreements with platforms. In those cases, you must:

Register for a TOT permit with your city/county
Collect TOT from guests yourself (or add it to nightly rates)
File TOT returns monthly or quarterly
Pay TOT by the deadline (usually 20–30 days after filing period)

This is much more work than platform collection. Many hosts in these jurisdictions struggle with manual collection and filing. Missing a deadline can result in penalties of 50% of unpaid tax plus interest.

Income Tax on STR Earnings (Federal + State)

How Much Do You Actually Owe?

Your income tax depends on your total household income, filing status, and deductible expenses. Here's a rough example:

Example: Single Filer, $60,000 STR Gross Income

Gross STR revenue: $60,000
Deductible expenses: $15,000 (mortgage interest, utilities, insurance, repairs)
Net STR income: $45,000
Other household income: $40,000 (W-2 job)
Total taxable income: $85,000
Federal income tax (2026 rates): ~$9,700
Self-employment tax (15.3% on net STR): ~$6,900
State income tax (example: CA 9.3%): ~$4,185
TOTAL TAX: ~$20,785

In this scenario, the host owes approximately 35% of gross STR revenue in combined taxes—much higher than most hosts expect.

Self-Employment Tax (The Hidden Tax)

Many hosts don't realize they owe self-employment tax in addition to income tax. This covers Social Security and Medicare (15.3% of net STR income).

Unlike W-2 employees (who split this with employers), self-employed hosts pay the full amount. This can add $5,000–$15,000 annually depending on income.

Deductible STR Expenses (Reduce Your Tax Bill)

Here's where hosts can significantly reduce taxes. Common deductible expenses include:

Expense Category	Examples	Typical Annual Cost
Mortgage Interest	Interest portion of monthly payments	$4,000–$12,000+
Property Tax	Annual property tax bill (% for STR use)	$1,500–$5,000+
Insurance	STR-specific insurance premium	$800–$2,500
Utilities	Electric, gas, water (% for rental)	$1,200–$3,000
Cleaning	Professional cleaning between guests	$2,400–$6,000
Repairs & Maintenance	Painting, plumbing, appliance repairs	$1,500–$5,000
Furnishings	Beds, furniture (depreciated over years)	$2,000–$8,000
HOA Fees	Homeowners association dues (% for rental)	$500–$3,000
Platform Fees	Airbnb/VRBO commission (3–5%)	$1,800–$3,000
Professional Services	Accounting, tax prep, property management	$1,000–$5,000

Important: You can only deduct the percentage of expenses attributable to STR use. For example, if you use 70% of your home for guest rentals, you can deduct 70% of utilities, property tax, etc.

Record Keeping: The IRS Requirement

The IRS requires detailed record-keeping. Without documentation, you can't prove deductions if audited. Essential records include:

Booking records: Guest names, dates, nightly rates, total revenue
Expense receipts: Cleaning, repairs, supplies, insurance, utilities
Bank statements: Income deposits and expense withdrawals
Property photos: Documentation of condition and improvements
Calendar/logs: Personal use dates (for percentage calculations)
Tax forms: 1099-K from Airbnb/VRBO, 1099-NEC from management companies

Pro tip: Use accounting software (QuickBooks, Xero, Wave) to track income and expenses automatically. This makes tax time much simpler and helps if you're audited.

When Do You File STR Taxes?

TOT/HOT Filing

Filing frequency: Monthly or quarterly (varies by city)
Filing deadline: Usually 20–30 days after period ends
Missed deadline penalty: 10–50% of unpaid tax
Who files: You (if platform doesn't collect), or verify platform is filing

Federal Income Tax (IRS)

Filing date: April 15 (or Oct 15 with extension)
Form required: Schedule C (Profit or Loss from Business) attached to Form 1040
Estimated taxes: Quarterly payments due Apr 15, Jun 15, Sep 15, Jan 15
Missed quarterly payment penalty: 5–10% of underpayment

State Income Tax

Filing date: Same as federal (Apr 15)
Varies by state: Some states (TX, FL, WA) have no income tax; others charge 5–13%
Some states require: Separate Schedule C for self-employment

Common Tax Mistakes (And How to Avoid Them)

Mistake #1: Not Tracking Income Properly

Risk: Underreported income; IRS audit

Solution: Download 1099-K from Airbnb and reconcile against your records. Report all income, even unreported 1099 income.

Mistake #2: Not Deducting Legitimate Expenses

Risk: Overpaying taxes by thousands; leaving money on the table

Solution: Keep all receipts and work with a CPA to identify all deductible expenses. Proper deductions can reduce tax by 20–40%.

Mistake #3: Missing TOT Filing Deadlines

Risk: Penalties of 50%+ of unpaid tax; late fees; license suspension

Solution: Use a tax calendar or accountant to track all deadlines. Set reminders 10 days before each deadline.

Mistake #4: Mixing Personal and STR Use

Risk: Deductions disallowed; audit triggers

Solution: Keep detailed calendar of personal use days. Only deduct proportional expenses (if 70% rental use, deduct 70%).

Mistake #5: Not Setting Aside Tax Money

Risk: Unable to pay tax bill when due; penalties and interest

Solution: Set aside 30–40% of gross revenue in a dedicated tax savings account monthly. This covers TOT, federal, state, and self-employment taxes.

Sample Annual Tax Breakdown (LA Host Example)

Property: 1-bedroom apartment, $150/night, 20 bookings/month

Annual Gross Revenue:

$150/night × 20 nights/month × 12 months = $36,000

Taxes Owed:

TOT (collected by Airbnb, remitted to LA): $36,000 × 14% = $5,040 (included in guest price)
Net STR income (after $8,000 expenses): $28,000
Federal income tax: ~$3,900 (combined with other income)
Self-employment tax: ~$3,955
California state tax: ~$1,872
Total income + SE tax: ~$9,727
Total tax as % of gross: 27% (TOT + income/SE + state)

The Bottom Line

STR taxes are complex, but manageable if you plan ahead. Expect to owe 25–40% of gross revenue in combined TOT, federal, state, and self-employment taxes depending on your city and expenses.

The three rules for tax success:

Track everything: Use accounting software; keep receipts
Deduct aggressively (but legitimately): Work with a CPA to maximize deductions
Set aside 35–40% of gross revenue for taxes; pay quarterly estimates to avoid penalties

Getting tax-compliant takes effort, but the alternative—tax liens, audits, and penalties—is far worse.