VRS079 – Vacation Rental Tax Talk with Hot Spot Founder Rob Stephens

Do you find your vacation rental taxes confusing? Would it help to have a little help with licensing and remitting the appropriate taxes?

For us up here in the frozen north (not so frozen now since spring and humidity have arrived ) we are in a fortunate situation. We don’t pay tax on our vacation rentals.

By that I mean we don’t have any of the multitude of taxation that impacts so many vacation rental owners in most parts of the US. Of course we still pay the federal and provincial taxes, and sales tax once income goes beyond a threshold of around 30K. But thankfully there is nothing else to pay – at the moment. I am sure it will not be long in coming, so learning a bit more about how it’s done down south in interesting.

Hotel tax, lodging tax, transient occupancy fees, tourist tax, are just some of the names put on the pound of flesh your local, municipal, state and federal government are now imposing. On top of that there might be a sales tax and a licensing fee as well.

Some of these might be annual fees but others are monthly or quarterly. Not only do they add up in dollars but there is a hefty time element too – time you probably could you use better elsewhere.

And that is where Hot Spot Tax comes in.

tweetTweet: Great podcast episode covering #VacationRental tax issues with @HotSpotTax @Cottageguru http://ctt.ec/c45cd+ pic.twitter.com/tg42iTRRYi

Today’s guest is the founder of Hot Spot Tax (recently acquired by Avalara) – Hot Spot provides an automated state and local tax compliance solution specifically for vacation rental owners. For a relatively small monthly fee they will (from the Hot Spot website)

  • Determine your vacation rental taxes & reporting requirements
  • Inform you of changes in tax rules
  • Apply for your required rental & business licenses
  • Manage your license renewals for the life of your service
  • Send you reminders when it's time to report your rental revenue
  • Calculate your taxes, file your returns & pay amounts due
  • Handle all notices & correspondence with the tax agencies
  • Guarantee tax rates, licenses & returns are accurate & timely

Rob is a vacation owner himself with a condo in Vail, Colorado, as well as being a CPA, so who better to tell us about tax compliance in an often complex and confusing scenario.

I never thought I’d use the word ‘interesting’ and ‘tax’ in the same sentence, but I found what Rob had to share was fascinating. He tells us about:

  • Why he founded Hot Spot Tax specifically for the vacation rental business
  • The difference between federal taxation on vacation rental income and lodging taxes?
  • The steps a new vacation rental owner needs to take to find out their obligations to their state/county/local governments?
  • What happens if an owner has been failing to remit the required lodging tax.
  • Hot Spot’s partnership with Home Away and how it can benefit HA and VRBO subscribers


Links mentioned in this episode:

Hot Spot Tax

Home Away Press Release

Fort Lauderdale VR Legislation

Santa Monica Home-Sharing Ordinance

Where you can find Rob & Hot Spot Tax: