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Airbnb Rentals Would Be Subject to Hotel, Sales Taxes Under Senate Bill

All but 14 counties charge innkeeper's tax

(INDIANAPOLIS) - If you stay in an Airbnb in Indiana, you may not be paying hotel taxes. A Senate bill would change that.

Hotels are subject to the 7% state sales tax, and all but 14 Indiana counties have an innkeeper's tax, ranging from 3% to 10%. A Senate committee unanimously approved a bill applying the same taxes to Airbnb and other private home rentals .

Portage Senator Karen Tallian (D) says the Indiana Supreme Court has already ruled short-term renters are retailers. Her bill would spell out in the law that they're responsible for collecting taxes, though it would allow a facilitator like Airbnb or VRBO to collect it for them. Airbnb has said in the past it's willing to do that.

State fiscal analysts say there's no way to guess how much money the change will bring in.

The bill wouldn't apply if you rent your home fewer than 15 nights a year. That parallels federal tax law on rental income.

(Photo: Andrey Popov/Thinkstock)

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