Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Washington tax professional before filing.
Washington State · USA · Short-term rental taxes
Short-Term Rental Taxes in Washington State
Washington has no state income tax, but STR hosts must register with the Department of Revenue and collect state retail sales tax, state lodging tax, and applicable local lodging taxes on every booking.
The 30-Second Answer
- No Washington state income tax — STR income is reported on your federal return (IRS Schedule E or Schedule C), but Washington does not tax personal income.
- You must register for a Washington Business License and collect Retail Sales Tax (varies by location, typically 8–10%+) plus the Special Hotel-Motel Tax (state lodging tax up to 2%) on each booking.
- Platforms like Airbnb and Vrbo are designated Marketplace Facilitators in Washington and collect and remit state and many local lodging taxes on your behalf — but you remain responsible for any taxes the platform does not cover.
- STR hosts may deduct ordinary and necessary rental expenses (mortgage interest, repairs, depreciation, management fees, etc.) on their federal return; Washington's Business & Occupation (B&O) Tax may also apply to gross rental receipts.
Deductions
Federal Deductions Available to Washington STR Hosts
Washington has no state income tax, so these deductions reduce your federal taxable income only. Deduct only the portion of expenses attributable to rental use.
Mixed-use properties (personal + rental) require expense allocation between personal and rental days. Consult a tax professional for your specific situation. Washington property taxes paid on a rental property are deductible as a business expense on Schedule E, not subject to the federal SALT cap.
Filing Calendar
Key Dates & Filing Calendar
Washington STR hosts face both federal IRS deadlines and Washington Department of Revenue (DOR) excise tax filing deadlines.
Washington DOR assigns your filing frequency (monthly, quarterly, or annually) based on your expected tax liability. Check your My DOR account for your specific due dates.
Washington Department of Revenue – File & Pay Taxes: dor.wa.gov/file-pay-taxes
Tax Treatment
Schedule E vs. Schedule C: Which applies to your Washington STR?
Washington has no state income tax, so the federal treatment of your STR income is the key decision. The IRS distinguishes passive rental income (Schedule E) from active business income (Schedule C) based on services provided.
Schedule E – Passive Rental
Standard rental income treatment for most STR hosts
- Report gross rents and deduct expenses (depreciation, mortgage interest, repairs, insurance, management fees) on IRS Schedule E.
- Rental losses may be limited by passive activity rules; up to $25,000 loss allowance phases out between $100,000–$150,000 AGI.
- Not subject to self-employment (SE) tax on net income.
- Washington has no state income tax, so no state return is required for this income.
No income ceiling
Schedule C – Self-Employment / Active Business
Applies when substantial services are provided to guests
- Net profit is subject to federal self-employment (SE) tax (~15.3% on first $168,600 in 2024).
- Allows deduction of the employer-equivalent half of SE tax and potential QBI deduction (Section 199A).
- Washington B&O tax may apply to gross receipts under the 'Service & Other Activities' or 'Retailing' classification.
- Consult a CPA if you are unsure whether your services cross the threshold from passive rental to active business.
No income ceiling
Depreciation
Federal Depreciation for Washington STR Properties
The IRS allows you to depreciate the cost of your rental property (excluding land) over its useful life. This is a non-cash deduction that can significantly reduce federal taxable income.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Applies to the building value only; land is not depreciable. Most Washington STR homes use this schedule. |
| Furniture, appliances & fixtures | 5 years (MACRS) | Beds, sofas, kitchen appliances, TVs. Bonus depreciation rules may allow faster write-off in the year of purchase. |
| Carpeting & flooring | 5 years (MACRS) | Treated as personal property if easily removed; otherwise may be 27.5-year property. |
| Land improvements (fencing, landscaping, driveway) | 15 years (MACRS) | Separate from the building; eligible for bonus depreciation in some years. |
A cost segregation study can reclassify building components into shorter-lived asset classes, accelerating depreciation deductions. Consult a CPA or cost segregation specialist.
When you sell the property, the IRS recaptures depreciation previously deducted at a maximum federal rate of 25% (Section 1250 unrecaptured gain). Washington has no state income tax, so there is no state-level recapture.
Washington Lodging Taxes
State & Local Lodging Taxes on Washington STRs
Washington STR hosts must collect and remit several overlapping taxes on each booking. Rates vary by city and county.
Washington imposes retail sales tax plus a state special hotel-motel tax on short-term lodging. Cities and counties may layer on additional lodging taxes. The combined rate varies significantly by location — Seattle-area hosts face some of the highest combined rates in the state.
~15.6%+ (Seattle area example; varies by jurisdiction)
Washington Department of Revenue – Lodging Taxes: dor.wa.gov/education/industry-guides/lodging-guide/lodging-taxes; MRSC Lodging Tax overview: mrsc.org/explore-topics/finance/sales-excise-taxes/lodging-tax
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking (WA) | Airbnb collects and remits state retail sales tax and state lodging tax as a Marketplace Facilitator; some local taxes also collected by Airbnb | You should not double-collect taxes Airbnb already remits. Verify which local taxes Airbnb covers in your specific city/county. |
| Vrbo / direct booking | Vrbo collects state taxes in WA as a Marketplace Facilitator; for direct bookings, host must collect and remit all applicable taxes | For direct bookings, register with WA DOR, collect all taxes from guests, and file excise tax returns on your assigned schedule. |
| Local city/county lodging tax | May be collected by platform or by host depending on the specific city/county and platform agreement | Check with your city or county and confirm with your platform which local taxes they remit on your behalf. |
Washington law (RCW 67.28) authorizes cities and counties to impose lodging taxes. Rates and applicability differ across Washington's 39 counties and hundreds of cities. Always verify current rates with your local jurisdiction and the WA DOR.
Platforms
How Airbnb, Vrbo & Other Platforms Handle Washington Taxes
Washington designated major booking platforms as Marketplace Facilitators, meaning they collect and remit certain taxes on your behalf — but coverage varies.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Yes — Form 1099-K if thresholds met (>$20,000 gross & >200 transactions in 2025; lower thresholds in future years) | Yes — state retail sales tax and state lodging tax; many (not all) local lodging taxes | Available in host dashboard by January 31 |
| Vrbo / Expedia | Yes — Form 1099-K if thresholds met | Yes — state retail sales tax and state lodging tax in WA; local tax coverage varies | Available in host dashboard by January 31 |
| Direct / other platforms | Platform may issue 1099-K; host responsible for all reporting | No — host must collect and remit all applicable WA state and local taxes directly | Host must maintain own records |
Hosting on multiple platforms?
Add up gross income from all platforms for your federal return. Each platform reports independently to the IRS. Ensure you are not double-counting taxes already remitted by a Marketplace Facilitator, and verify local tax coverage for each platform in your specific Washington city or county.
US Information Reporting (Form 1099-K)
The US equivalent of DAC7 is IRS Form 1099-K reporting. For 2025, Airbnb issues a 1099-K for hosts with more than $20,000 in gross transactions AND more than 200 transactions. The IRS has proposed lowering this threshold to $600 in future years. Washington state has its own 1099-K reporting requirements aligned with federal thresholds.
Washington DOR – Airbnb Marketplace Facilitator: dor.wa.gov/forms-publications/publications-subject/tax-topics/airbnb-collect-and-send-taxes-behalf-hosts; Airbnb US tax documents: airbnb.com/help/article/414
Illustrative P&L: Schedule E vs. Schedule C
Example only — a Washington STR generating $40,000/year in gross rental income. Figures are illustrative; your results will vary.
Record-Keeping
Stay Audit-Ready: What Washington STR Hosts Should Keep
Good records protect you in an IRS audit and help you maximize legitimate deductions. Washington DOR may also audit your excise tax filings.
| Keep | How long | Why |
|---|---|---|
| Booking records (guest name, dates, nightly rate, platform) | At least 4 years | Supports gross income reported on federal return and Washington excise tax returns; IRS statute of limitations is generally 3 years |
| Platform payout statements and 1099-K forms | At least 4 years | Primary income documentation for IRS and WA DOR; reconcile against your own records |
| Receipts for all rental expenses (repairs, supplies, cleaning, utilities) | At least 4 years | Required to substantiate deductions on Schedule E or C; IRS may disallow undocumented expenses |
| Depreciation schedules and property purchase documents | Permanently (until property sold + 4 years) | Depreciation recapture at sale requires full history of deductions taken; cost basis documentation needed for capital gains calculation |
| Washington DOR excise tax returns and payment confirmations | At least 4 years | WA DOR can audit excise tax filings; demonstrates compliance with retail sales tax and lodging tax obligations |
Washington has no state income tax return, but the WA DOR can audit your excise tax (retail sales tax, B&O tax, lodging tax) filings. Keep records of all taxes collected from guests and remitted to DOR, as well as any taxes remitted by platforms on your behalf.
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 or legal advice. Tax laws change frequently. Always verify current rates and rules with the Washington Department of Revenue and a qualified tax professional.
- Washington DOR – Personal Home Rentals — dor.wa.gov/education/industry-guides/lodging-guide/personal-home-rentals — Official WA DOR guidance on STR tax obligations for hosts
- Washington DOR – Lodging Taxes — dor.wa.gov/education/industry-guides/lodging-guide/lodging-taxes — Overview of state and local lodging tax rates and rules
- Washington DOR – Airbnb Marketplace Facilitator — dor.wa.gov/forms-publications/publications-subject/tax-topics/airbnb-collect-and-send-taxes-behalf-hosts — Explains Airbnb's role collecting WA taxes
- MRSC – Lodging Tax (Hotel-Motel Tax) — mrsc.org/explore-topics/finance/sales-excise-taxes/lodging-tax — Municipal Research and Services Center overview of WA local lodging tax authority
- Airbnb Help – US Tax Documents — airbnb.com/help/article/414 — Form 1099-K and other US tax document thresholds and issuance dates
- IRS – Publication 527 (Residential Rental Property) — irs.gov/publications/p527 — Federal rules for rental income, expenses, and depreciation
- Washington State Legislature – RCW 67.28 (Lodging Tax) — app.leg.wa.gov/RCW/default.aspx?cite=67.28 — Statutory authority for WA lodging taxes
- Washington State Legislature – RCW 64.37 (Short-Term Rentals) — app.leg.wa.gov/RCW/default.aspx?cite=64.37.010 — State definition of short-term rentals
Questions
Frequently Asked Questions: Washington STR Taxes
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