Are You Paying Occupancy Tax on Your Rental Accommodations?
If you rent out your home or vacation property the State of North Carolina and Jackson County law requires you to collect occupancy tax from your guests. You are only exempt if the below circumstances apply:
- A privately-owned residence/cottage rented for fewer than 15 days per year;
- A rental to the same person of more than 90 continuous days; and,
- Accommodations related to schools or camps that charge tuition or fees for enrollment.
This occupancy tax is in addition to state and local sales tax, and is based on gross room sales.
Who do I need to speak with about NC Sales Tax?
What if I do not know how long my home will be rented or if it will be rented for a period of time that mandates I pay occupancy tax?
You should setup an account to remit. If total days rented for the year are less than 15 or if an individual guest stays longer than 89 consecutive days, the remitter may seek a refund from Jackson County Finance Department.
Should individual owners who rent their properties via on-line services such as AirBnB and VRBO be collecting and remitting occupancy taxes?
Yes. If a property owner rents out an accommodation for 15 or more days per year, then that owner should be collecting occupancy taxes from the tenants and remitting that tax to Jackson County. It matters not whether the owner rents the property without assistance, contracts with a local rental agency, or uses an on-line rental service.
Note: AirBNB remits tax on your behalf to the County. With VRBO and other services, you will need to setup a finance account (see below).
Are rentals of campsites or RV sites that provide power and/or water subject to occupancy taxes?
No. The tax covers only the rental of “accommodations,” defined by G.S. 105-164.4(a)(3) as “a hotel room, a motel room, a residence, a cottage or similar lodging facility.” This definition suggests the rental must provide some type of structure in which the renter may lodge for the night.
Basic campsites, RV sites, and boat slips do not provide lodging structures as part of the rental, so the tax should not apply. The tax would apply to the rental of a campsite that included a tent or other lodging structure or to the rental of a houseboat.
Do non-profits or corporations have to pay occupancy taxes?
What if someone stays more than 90 days in a rental property?
With many extended rentals the full length of the rental period may not be known until after the rental ends, in which case a refund may need to be provided.
Consider a family that rents a mountain house for two summer months, June and July. The owner of that property must collect and remit taxes on that rental. If the family decides to extend the rental thru the end of August that rental would now be greater than 89 continuous days. The owner of the property would not need to collect taxes for the August rent and may seek a refund of the taxes paid on the rental for June and July.
The refund check should be sent to the owner, who should then return it to the tenant. But it is not the job of the taxing unit to make sure the owner does so; that would be a private dispute between owner and tenant in which the taxing authority should not get involved.
Do I need special insurance to rent my home as a short-term rental?
One should check with their home insurance provider to ensure their policy is compatible with short-term rental programs. Some short-term rental providers include insurance (example).
Why is Occupancy Tax Important to Collect?
The tax paid by visitors helps fund advertising and promotion of Jackson County to potential travelers. With the collection of occupancy taxes we are able to position the county as a premier tourist destination and bring you more business. The tax is not paid by accommodations, as they are simply a pass-through for the visitor remitting the tax.
How To Register/Set Up an Account
You must register your rental property with the Jackson County Finance Office, which will instruct you how to remit the occupancy tax money you collect. There are forms to setup your account online here. The Finance Department can be reached at 828-631-2251, and the mailing address is 401 Grindstaff Cove Road, Sylva, NC 28779.
Failing to register, file & pay the occupancy tax will result in penalties, which mirror NC sales & use tax as stated in General Statute 105-236, including:
- In case of failure to file any return on the date it is due, a penalty equal to 5% of the amount of tax will be assessed if the failure is for not more than one month, with additional 5% for each additional month, or fraction thereof, during which the failure continues, not exceeding 25% in the aggregate, or $5.00, whichever is greater.
- In the case of failure to pay any tax when due, a penalty equal to 10% of the tax will be assessed, except the penalty shall in no event be less than $5.00.
- Any person who willfully fails to pay the tax, make the return, keep records or supply required information shall be guilty of a Class 1 misdemeanor.
- Further, any person who willfully attempts to evade or defeat a tax or its payment, shall be guilty of a Class H felony.
- The County Finance Officer may direct that the financial records of accommodations be audited.
When is Occupancy Tax due?
Occupancy Tax remittance and forms must be delivered in person or postmarked on or before the 20th of every month for the previous month of sales. For example, Occupancy Tax for the month of July (1st-31st) is due on or before August 20th. If the 20th falls on a weekend, the due date will be the following Monday.
If the due date falls on a legal holiday, the return and payment are due on the following business day.
What are the accepted payment methods?
Payments are accepted in the form of check or money order physically delivered or mailed to the Jackson County Finance Department. Cash may be accepted in person. Credit card payments are no longer accepted over the telephone.
Where do I get forms to file occupancy tax by mail?
Forms are available online here.
Can I pay online?
Yes, you can remit your monthly filing and pay occupancy tax online here. Accepted online payment methods are Visa, MasterCard, Discover, American Express, PayPal, and PayPal Credit. The fees charged are 2.25% + $0.30 for credit cards. The fee for e-checks is $1.50.
Please note the following:
- A tax report must be filed for each calendar month.
- If you owe no tax for the month, file the report and show “no tax due.”
- You may submit tax reports (showing “no tax due”) for each month you will be closed ahead of closing for an extended period of time.
- Return the report with your check, made payable to Jackson County.
- Mail your reports to the Jackson County Finance Department, 401 Grindstaff Cove Road, Sylva, NC 28779.