Did you know that there are more than 150 million total users on Airbnb? Every second, 6 guests will check into an Airbnb listing. In the United States alone, there are 660,000 listings. It’s not surprising that Pennsylvania homeowners want to get in on this side hustle. However, The Keystone State has some specific rules about short-term rentals you need to be aware of.
2019 Supreme Court of Pennsylvania Ruling: Slice of Life, LLC v. Hamilton Township Zoning Board, et al.
In 2019, the Slice of Life company bought property with the intention of using it for short-term rentals. Owner, Val Kleyman invested, allowing others to use the home. However, residential zoning laws were brought into question.
Typically, residential zoning laws are enacted to protect those in the neighborhood from “increased noise and traffic, protect children living there and their ability to utilize quiet, open spaces for play, and to maintain ‘the residential character of the neighborhood.’”
The idea that Kleyman was utilizing the property as a short-term rental had zoning officials questioning if this was just.
Ultimately, The Supreme Court of Pennsylvania unanimously decided that the Monroe County township’s zoning ordinance bars the short-term rental of homes in strictly residential districts. The Supreme Court reversed the Commonwealth Court’s ruling and found in favor of Hamilton Township and its zoning board.
This is because the property was zoned as a “single housekeeping unit” meaning that those living in the dwelling would function as a family within the household and if those individuals were sufficiently stable and permanent and not just short-term.
So, does this mean no one in Pennsylvania can rent out property for short-term rentals?
Pennsylvania Legislation on Short-Term Rentals
According to the Pennsylvania Department of Revenue, “Under Pennsylvania law, anyone who rents out their property to provide lodging for less than 30 days to the same person must collect and remit the Pennsylvania hotel occupancy tax to the Department of Revenue.”
The tax applies to hotels, rentals of rooms, apartments, and houses arranged through online or third-party brokers.
In addition to the hotel occupancy tax, the department also collects taxes by county which can be found at the Department of Community and Economic Development.
Other Terms to Be Aware Of
Utilizing short-term rental programs is not as simple as placing an ad online. There are certain measures you as a Pennsylvania resident must abide by.
- Third-Party Broker: Some third-party brokers voluntarily collect and remit the Pennsylvania hotel occupancy tax on behalf of hosts. Users must review the terms to determine who is responsible for collecting and remitting the state and/or local tax.
- Registering to Collect the Tax: However, before collecting the tax, you must be registered with the Department of Revenue for a Sales, Use, and Hotel Occupancy Tax License.
- Remitting the Tax: After registering and obtaining a tax license and account number, taxpayers must file returns and remit the tax electronically.
- Separate Income: It is important to note that hotel occupancy taxes are separate from income earned from renting short-term lodging.
Diving into short-term rentals as a business venture is one to thoroughly review. It is best to review your options with a real estate attorney before you sign any paperwork to ensure you are not violating any local statutes.
Contact the Short Term Rental Attorneys of Mazzoni Karam Petorak & Valvano
If you are considering a short-term rental venture through a third-party, you must make sure you are abiding by state and local laws. Mazzoni Karam Petorak & Valvano can help you determine the right way to proceed. Contact us to schedule an appointment.