Short-Term Residential Rental Registry
“Home sharing” refers to the rental of houses, condos, or apartments to short-term guests. This has become a popular way for owners and tenants (“operators”) to earn extra income across the United States. Short Term Residential Rentals typically occur through online home-sharing platforms, such as Airbnb, craigslist, Expedia, FlipKey, HomeAway, TripAdvisor, and VRBO.
Home sharing is generally subject to the same taxation as hotels and other businesses. Nationwide, many localities are working to ensure that all taxes are assessed and collected fairly. This involves identifying properties involved in home sharing and collecting taxes due. It’s difficult to determine the amount of home sharing because estimates of the number of short-term rental properties in Alexandria vary widely.
Short Term Residential Registry
If you operate one or more short term residential rentals in the City, you must complete this free registration process.
Changes to Transient Lodging Effective October 2022
Effective October 1, 2022, the General Assembly of Virginia amended and reenacted legislation relating to sales and transient lodging tax for accommodation intermediaries. As amended, Code of Virginia §58.1-3826 (F) requires accommodations intermediaries to “submit to a locality the property addresses and gross receipts for all accommodations facilitated by the accommodations intermediary in such locality. Such information shall be submitted monthly.”
Starting with October 2022 transient lodging tax return filing (due on or before November 30, 2022), all accommodation intermediaries are required to remit the supplementary report to the City of Alexandria on a monthly basis. The report should include the property addresses and gross receipts for all accommodations. This information, along with the monthly return, can be uploaded on the Business Tax Portal at https://businesstaxportal.alexandriava.gov/BTP or remitted via mail to PO Box 34842, Alexandria, VA 22334-0842.
Short-Term Residential Rental Property Owners
If you do not utilize accommodation intermediaries to collect the room charges, fees, and taxes on your behalf, you are required to collect and remit the taxes on a monthly basis directly to the City of Alexandria. Please complete the Transient Lodging Tax Return and submit to email@example.com along with IRS form W-9.
The City of Alexandria Code Section 3-2-152 requires the operator of each short-term residential property to register with the Department of Finance on an annual basis. Please complete the online registry, reporting each platform you use to advertise your property. All property owners and property managers must register and complete the annual registration
In November 2017, City Council adopted a recommendation from City staff on how to register and collect taxes from Short-Term Residential Rentals in Alexandria, pursuant to a new state law that took effect in 2017. Prior to adoption, the City hosted a community meeting to gather input on October 17.
Accommodations Intermediary - Any person other than an accommodations provider that facilitates the sale of an accommodation, charges a room charge to the customer, and charges an accommodations fee to the customer, which fee it retains as compensation for facilitating the sale. For purposes of this definition, "facilitates the sale" includes brokering, coordinating, or in any other way arranging for the purchase of the right to use accommodations via a transaction directly, including via one or more payment processors, between a customer and an accommodations provider.
- Short-term rental properties are already subject to the following taxes:
- State and local Sales Taxes totaling 6% must be collected from the renter and remitted by the operator to the Virginia Department of Taxation.
- Regional and local Transient Lodging Taxes of 9.5% plus $1.25 per room per night must be collected from the renter and remitted by the operator to the City of Alexandria for any rental that can lodge four or more persons at any one time .
- Staff is considering a proposal to City Council to amend the ordinance by removing this reference. This would promote equity between short-term rentals of various sizes.
- The operator must obtain a Business, Professional and Occupational License (BPOL) if their gross revenue is greater than $10,000 annually, and they rent more than four separate dwelling units (each having cooking facilities). A BPOL license is only required if they meet these two conditions.
- Short-term rental properties do not require zoning or permitting approvals solely on that basis, but any normal zoning or permitting provisions (e.g. maximum occupancy, construction permits) would still apply.
Improving Efficiency for Taxpayers and the City
- Airbnb appears to comprise 70 to 80 percent of the short-term rental market in Alexandria. The City is exploring with Airbnb a voluntary agreement whereby Airbnb would collect the Transient Lodging Tax as part of the rental payment process and remit it to the City. This would ensure that the tax is paid without requiring the operator to take any other action, and would reduce City staff time to obtain and process tax returns. However, Airbnb has indicated that it will not disclose the identity, location or amounts by operators’ names or addresses, and will not allow the City to audit Airbnb records more frequently than once every four years, or audit by name or address. Staff can audit individual operators based on the new registry.
- For non-Airbnb properties, there are third-party companies that can help the City identify potential short-term rental properties for a fee paid by the City. This could provide a cross-check to help ensure all operators are complying with the registration process. Although resulting tax revenue would be expected to exceed the fee, there would still be a cost involved for City staff to conduct collection activity using the data. The third-party data also typically has difficulty identifying individual condominium units. Thus, the new registry option remains an important consideration to ensure fair tax assessment and collection.
New State Law
The new law ( § 15.2-983) allows a locality to adopt an ordinance to establish a local registry of short-term rental properties as follows:
- Registration is administrative in nature. The law does not change any existing tax or zoning requirements, condo or lease provisions, homeowner association restrictions, or other agreements or rules.
- Registration is annual and requires the operator’s name and the address of each property.
- The locality may charge a reasonable fee to administer the registry, if it deems necessary.
- The locality may assess a penalty of up to $500 per violation for failure to register, and may prohibit the rental of a property that has not registered or paid registry fees or penalties. Repeated violations may result in the prohibition on rental of applicable properties.
- The state law defines “short-term rental” as “the provision of a room or space that is suitable or intended for occupancy for dwelling, sleeping, or lodging purposes, for a period of fewer than 30 consecutive days, in exchange for a charge for the occupancy,” and defines “operator” as “the proprietor of any dwelling, lodging, or sleeping accommodations offered as a short-term rental, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or any other possessory capacity.”
- The registry would not apply to real estate agents, properties represented by real estate agents, registered time-shares, or licensed lodging establishments such as hotels.