Does the owner of a single-family vacation rental have to charge New York sales tax on the rent when he provides no housekeeping or linen service during the stay?

Plain-English summary

New York's sales tax on lodging applies to the rent for "every occupancy of a room or rooms in a hotel." The owner here rented out his owner-occupied single-family house to short-stay guests (two-night minimum), sometimes a suite, sometimes the whole house. He provided no food, no daily cleaning, and no linen service — the house was just cleaned between guests.

The Office of Counsel concluded the rent is not subject to sales tax. A building is a "hotel" only if it has hotel-like characteristics, and one of the listed factors is that "housekeeping, linen, or other customary hotel services are provided for occupants." Because this owner provided none of those services during a guest's stay, his vacation rental does not qualify as a hotel, so the rent is outside the state sales tax. The opinion expressly notes it does not address any separate local hotel/occupancy tax, which many counties and cities impose on their own.

What this means for you

Vacation-rental and short-term-rental owners

Simply renting out a house or rooms, without providing housekeeping, linen, or similar hotel services during the stay, generally keeps you out of the state sales tax on hotel occupancy. Add daily cleaning, linen changes, or other customary hotel services and you may cross into "hotel" status and owe tax.

Important: local occupancy taxes still apply

This opinion only addresses state-administered sales tax. Counties and cities across New York impose their own "bed tax" / hotel-occupancy taxes, and many of those reach short-term rentals regardless of this opinion. Check the rules for your specific locality (and any marketplace platform's collection obligations).

Accountants and tax professionals

The analysis is the hotel-definition test in Tax Law § 1101(c)(1) and the multi-factor test in 20 NYCRR 527.9(b). The presence or absence of customary hotel services is decisive here. Publication 848 and TSB-A-04(7)S, TSB-A-15(11)S, and TSB-A-15(38)S inform the factors.

Common questions

Q: Is my Airbnb/vacation rental subject to New York sales tax?
A: For state sales tax, generally not if you provide no housekeeping, linen, or other customary hotel services during the stay. Providing such services can make it a taxable "hotel."

Q: Does cleaning the house between guests count as housekeeping service?
A: Per this opinion, cleaning between guests (with no daily cleaning or linen service during the stay) did not make the rental a hotel.

Q: So I owe nothing at all?
A: Not necessarily. This addresses only state sales tax. Local hotel/occupancy ("bed") taxes are separate and may still apply to your rental.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. It's strong guidance on the state sales-tax question, but confirm your own facts and check local taxes.

Citations and references

Statutes and regulations:
- Tax Law § 1105(e)(1) (tax on occupancy of a room in a hotel)
- Tax Law § 1101(c)(1) (definition of "hotel")
- 20 NYCRR 527.9(b) (factors for whether a building is a hotel)

Department guidance cited:
- Publication 848, A Guide to Sales Tax for Hotel and Motel Operators
- TSB-A-04(7)S; TSB-A-15(11)S; TSB-A-15(38)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao.htm
• Opinion: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales/24-50s.htm
• Printer-friendly PDF: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a24-50s.pdf

Original ruling text

TSB-A-24(50)S
Sales Tax
October 18, 2024

The Department of Taxation and Finance received a Petition for an Advisory Opinion from [ REDACTED ] (“Petitioner”). Petitioner asks whether he must collect sales tax on rent from his vacation property.

We conclude that the rent from Petitioner’s vacation property is not subject to sales tax.

Facts

Petitioner rents out his owner-occupied single-family house as a vacation rental to intermittent guests that stay for a minimum of two nights. Petitioner does not provide food, beverage or other services in connection with the rental. The house is cleaned in between guests, but there is no daily cleaning or linen service. Petitioner rents out three different suites, and sometimes the entire house, to guests. Petitioner occupies the master suite when no guests are booked.

Analysis

Generally, sales tax is imposed on the rent for every occupancy of a room or rooms in a hotel. See Tax Law § 1105(e)(1). A “hotel” is “a building, or portion of it, that is regularly used and kept open for the lodging of guests.” See Tax Law § 1101(c)(1).

The term hotel includes, but is not limited to, an apartment hotel, a motel, bungalow or cottage colony, boarding house, or club, whether or not meals are served. A building, or portion of the building, falls within this definition if, among other factors:

(i) sleeping accommodations are provided for the lodging of paying occupants on a regular basis;

(ii) typical occupants are transients or travelers;

(iii) housekeeping, linen, or other customary hotel services are provided for occupants; and

(iv) the relationship between the operator of the establishment and the occupant is that of an innkeeper and guest, not that of a landlord and tenant (e.g., the occupant does not have an exclusive right or privilege with respect to any particular room or rooms, but instead merely has an agreement for the use or possession of the room or rooms).

See 20 NYCRR 527.9(b); See also Publication 848 – A Guide to Sales Tax for Hotel and Motel Operators (2/15); TSB-A-04(7)S; TSB-A-15(11)S; and TSB-A-15(38)S.

Petitioner does not provide housekeeping, linen services or other services during a guest stay in connection with the rental of the vacation rental. Because Petitioner does not provide housekeeping, linen or other customary hotel services, the vacation rental does not qualify as a hotel for purposes of the State and local sales taxes administered by the Department. Therefore, the rent from the vacation property is not subject to sales tax.

This Advisory Opinion does not address any hotel occupancy tax imposed and administered by a local government.

DATED: October 18, 2024

MARY ELLEN LADOUCEUR
Principal Attorney

Note: An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts set forth therein and is binding on the Department only with respect to the person or entity to whom it is issued and only if the person or entity fully and accurately describes all relevant facts. An Advisory Opinion is based on the law, regulations, and Department policies in effect as of the date the Opinion is issued or for the specific time period at issue in the Opinion. The information provided in this document does not cover every situation and is not intended to replace the law or change its meaning.