Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified New York tax professional before filing.
New York State · USA · Short-term rental taxes
Short-Term Rental Taxes in New York State
STR income in New York is subject to federal and New York State income tax, plus a new statewide sales tax on occupancy that took effect March 1, 2025.
The 30-Second Answer
- Income tax: Report all STR rental income on federal Schedule E (or Schedule C if you provide substantial services); New York State mirrors federal treatment and you file Form IT-201 (residents) or IT-203 (part-year/nonresidents).
- New 2025 sales tax: Effective March 1, 2025, New York State and local sales tax applies to every STR occupancy charged more than $2.00 per unit per day; booking platforms like Airbnb and Vrbo collect and remit this on your behalf.
- NYC unit fee: An additional $1.50 per unit per day fee applies to every STR night within New York City boundaries, on top of the standard sales tax.
- 14-day rule: If you rent your home for 14 days or fewer in a year and use it personally for more than 14 days (or 10% of rental days), the rental income is federally tax-free and no Schedule E is required — but the new NYS sales tax still applies.
Deductions
Expenses You Can Deduct Against STR Income
When your property is rented more than 14 days a year, most ordinary and necessary expenses are deductible in proportion to rental use.
Mixed-use properties (personal + rental) require expenses to be allocated between personal and rental days. The IRS and NYS use the same allocation formula. Capital improvements are not immediately deductible — they must be depreciated over their useful life. This is educational information, not tax advice.
Filing Calendar
Key Dates & Filing Calendar
Federal and New York State deadlines for STR hosts in a standard calendar tax year.
New York State sales tax registration is required before you begin collecting tax. Booking services (Airbnb, Vrbo) handle collection and remittance for facilitated bookings, but direct-booking operators must register and file independently.
New York State Department of Taxation and Finance, Tax.NY.gov (2025); IRS Publication 527 (2025)
Income Tax Treatment
Passive Rental vs. Active Business: Which Applies to You?
The IRS (and NYS, which conforms) distinguishes between passive rental income and active business income based on services provided and time spent — this determines which form you use and what losses you can deduct.
Passive Rental (Schedule E)
Standard treatment for most STR hosts
- Report gross rents and deduct expenses on federal Schedule E; net income flows to Form 1040 and NYS Form IT-201.
- Passive activity loss rules apply — losses can generally only offset other passive income unless you qualify as a real estate professional or the $25,000 rental loss allowance applies (phases out $100k–$150k AGI).
- Depreciation on the building (27.5 years) is a major deduction that can shelter significant income.
- Self-employment tax does NOT apply to passive rental income.
No income ceiling
Active Business (Schedule C)
For hosts providing substantial services
- Report income and expenses on Schedule C; net profit is subject to self-employment tax (~15.3% on first $176,100 for 2025) in addition to income tax.
- Business losses are not subject to passive activity rules and can offset other income more freely.
- Qualified Business Income (QBI) deduction of up to 20% may apply if you meet IRS requirements.
- NYS conforms to federal treatment; report on Form IT-201 with the Schedule C income included.
No income ceiling
Depreciation
Depreciation for New York STR Properties
The IRS allows you to recover the cost of your rental property over time through depreciation. New York State conforms to federal depreciation rules under MACRS.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential building (structure) | 27.5 years (straight-line) | Only the building value — not land — is depreciable. Allocate purchase price between land and structure. |
| Appliances, furniture & fixtures | 5 years (MACRS) | Refrigerators, washers, beds, sofas etc. Bonus depreciation may allow faster write-off in year of purchase. |
| Carpeting & flooring | 5 years (MACRS) | Treated as personal property when in a rental unit; separate from the building structure. |
| Land improvements (driveways, fencing) | 15 years (MACRS) | Separate from the building; land itself is never depreciable. |
A cost segregation study can accelerate depreciation by reclassifying building components into shorter-lived asset classes, potentially generating larger deductions in early years. Consult a tax professional before undertaking one.
When you sell the property, previously claimed depreciation is subject to federal 'depreciation recapture' taxed at up to 25% (Section 1250 unrecaptured gain). New York State also taxes this gain as ordinary income at state rates.
NYS Sales Tax & Local Lodging Taxes
New York State Sales Tax on STR Occupancy (Effective March 1, 2025)
New York State now imposes sales tax on short-term rental occupancy statewide, with additional local and NYC-specific charges.
Effective March 1, 2025, New York State and local sales tax applies to every STR booking where the rate exceeds $2.00 per unit per day. Booking platforms are required to collect and remit this tax for facilitated bookings. The combined rate varies by county.
Up to ~8.875% + $1.50/night in NYC; 4%–8%+ elsewhere in NYS depending on county
New York State Department of Taxation and Finance, Tax.NY.gov — 'Sales tax on short-term rental unit occupancy' (effective March 1, 2025); NYS Senate Bill S820 (2025)
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Booking via Airbnb or Vrbo (facilitated) | The booking platform (Airbnb/Vrbo) collects from the guest and remits NYS sales tax directly to the state. | You do not collect or remit NYS sales tax for these bookings; the platform handles it. You should still track the gross amount for income reporting. |
| Direct booking (no platform) | The host/operator must register with NYS, collect sales tax from guests, and file returns (Form ST-100 or ST-809). | You are responsible for registration, collection, and quarterly (or monthly) remittance. Failure to register carries penalties. |
| NYC $1.50/night unit fee | Booking platforms collect and remit for facilitated bookings; direct operators must remit separately. | This fee is in addition to the percentage-based sales tax and is not itself subject to state sales tax. |
Some counties may impose additional local occupancy taxes beyond the standard local sales tax. Contact your county or municipality to confirm all applicable rates. The new STR registry law (S885-C / S820) also requires hosts to register with local registries where established.
Platforms
How Airbnb, Vrbo & Other Platforms Handle Your NYS Taxes
Major booking platforms act as 'booking services' under NYS law and are required to collect and remit state sales tax — but your income tax obligations remain your own.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Issues 1099-K (>$20,000 & >200 transactions in 2025) or 1099-MISC ($600+) to IRS and host | Yes — collects and remits NYS sales tax and NYC unit fee for NYS bookings | Annual earnings summary available in host dashboard; 1099 issued by January 31 |
| Vrbo / HomeAway | Issues 1099-K above IRS thresholds | Yes — collects and remits NYS sales tax for NYS bookings as a booking service | Annual earnings summary in host account; 1099 issued by January 31 |
| Direct bookings (your own website) | No platform reporting — host responsible for all income reporting | No — host must register with NYS, collect, and remit sales tax independently | No automatic summary; maintain your own records |
Hosting on Multiple Platforms?
If you use both Airbnb and Vrbo (or add direct bookings), each platform reports only its own payments. You must aggregate all income across platforms on your Schedule E or Schedule C. The IRS 1099-K threshold applies per platform, so you could receive no 1099 from any single platform yet still owe tax on the combined income. Keep your own running total.
US Reporting — No DAC7
DAC7 is a European Union directive and does not apply in the United States. The US equivalent is IRS Form 1099-K reporting by third-party settlement organizations. Airbnb's 2025 threshold for 1099-K is gross transactions exceeding $20,000 AND more than 200 transactions; the threshold is set to change in future years per IRS guidance.
Airbnb Help Center — 'US tax documents from Airbnb' (2025); IRS Publication 527 (2025)
Illustrative P&L: Schedule E vs. Schedule C
Example for a New York State host earning $30,000 in STR revenue with typical expenses. For illustration only — not a tax calculation.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
New York State and the IRS can audit STR returns; good records are your best defense.
| Keep | How long | Why |
|---|---|---|
| Booking records (reservation confirmations, payout statements from platforms) | At least 7 years | Proves gross rental income and number of rental days; needed to allocate mixed-use expenses |
| Receipts for all deductible expenses (repairs, cleaning, supplies, utilities, insurance) | At least 7 years | IRS and NYS can disallow deductions without documentation; 7 years covers the extended statute of limitations for substantial understatement |
| Property purchase documents, closing statements, and improvement records | As long as you own the property + 7 years after sale | Needed to calculate cost basis, depreciation, and gain/loss on eventual sale (including depreciation recapture) |
| Sales tax registration certificate and filed ST-100/ST-809 returns (if applicable) | At least 7 years | NYS can audit sales tax compliance; direct-booking operators must show they registered and remitted correctly |
New York State's standard audit look-back period is 3 years, but it extends to 6 years if more than 25% of income was omitted. The IRS standard is also 3 years, extending to 6 years for substantial omissions. Keep records longer if you have complex situations.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
This page is for educational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently — always verify current rates and rules with the New York State Department of Taxation and Finance (tax.ny.gov) and the IRS (irs.gov), or consult a qualified tax professional.
- NYS Dept. of Taxation and Finance — Sales tax on short-term rental unit occupancy — Official guidance on the March 1, 2025 expansion of NYS sales tax to STR occupancy, registration requirements, and booking service obligations. tax.ny.gov (2025)
- NYS Dept. of Taxation and Finance — Tax Bulletin ST-331: Hotel and Short-Term Rental Unit Occupancy — Detailed bulletin explaining how to calculate sales tax on hotel and STR occupancy, including the $2.00/day threshold and booking service rules. tax.ny.gov (July 2025)
- NYS Senate Bill S820 (Chapter Amendment, signed Feb. 28, 2025) — Chapter amendment providing additional implementation details for the statewide STR registry and sales tax law. nysenate.gov (2025)
- IRS Publication 527 — Residential Rental Property — Federal guidance on reporting rental income, deductible expenses, depreciation, and the 14-day personal use rule. irs.gov (2025)
- Airbnb Help Center — US tax documents from Airbnb — Explains 1099-K, 1099-MISC, and 1099-NEC thresholds and issuance dates for US hosts. airbnb.com (2025)
- The Bonadio Group — New York State's Expanded Sales Tax for Short-Term Rentals — CPA firm analysis of the STR registry law and sales tax implications for hosts. bonadio.com (March 2025)
- CohnReznick — New York State imposes sales tax on short-term rentals — Professional analysis of S820 and the March 1, 2025 effective date for NYS STR sales tax. cohnreznick.com (April 2025)
Questions
Frequently Asked Questions: New York STR Taxes
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