Chatham residents hosting paid guests must pay occupancy taxes

Pittsboro, NC – AirBnB has taken steps to pay state and some local occupancy taxes on lodging in North Carolina beginning June 1, 2015. More than 400 homes around Chatham County have space listed as lodging options through such services as Airbnb, HomeAway and VRBO. These are popular options for visitors looking for affordable or unique lodging that meets specific needs.

Airbnb smartphone appState and local laws require state sales tax and occupancy taxes to be paid regardless of the venue used to market lodging options. The contracts with Airbnb, HomeAway and other services also require hosts to collect and remit all applicable taxes.

If you rent out your home, a room(s) in your home, a cottage or vacation property for at least 15 combined days per year, you are required to collect from your guests a 3% county occupancy tax plus state sales tax. However, if you rent it for a consecutive period of 90 days or more, this is considered a short-term rental situation and taxes do not apply.

According to Margaret Goldston in the Chatham County Tax Office, local homes hosting paid guests should register with the Chatham County Tax Office. A monthly occupancy tax report should be filed on or before the 20th day of the month, along with payment of the 3% occupancy tax by check or money order.

Click here to get more information on the occupancy tax and the reporting form. If you have questions, call Margaret Goldston at 919-542-8224 or email her at .

After June 1, the NC Department of Revenue will have reports from Airbnb, along with state sales tax payments, so a database of homes doing business through Airbnb will exist.

Neha Shah with the Pittsboro-Siler City Convention & Visitors Bureau (CVB), which serves the entire county, said, “This is an important issue because the more traditional lodging entities, such as bed and breakfasts and hotels, have been collecting the occupancy tax from guests and remitting it to the county. News stories across the state have reported that some traditional entities have been hurt by losing business to those not paying the required taxes.”

As required by law, revenues generated by the occupancy tax must be spent on visitor marketing. In Chatham, the revenues have been used as the sole funding source of the CVB, which markets and promotes these businesses to potential visitors. The CVB has consistently increased visitor spending in Chatham County every year and has won numerous awards for its marketing of local establishments.

People renting out areas of their homes through Airbnb, HomeAway and other such places also may be required to have inspections or permits from Chatham County or one of the towns. For example, requirements related to kitchens, fire safety, building codes, food service, and water and septic systems may apply. For more information on what might be required, contact Central Permitting at 919-542-8230.