Clarification from Connecticut's Department of Revenue Services

I sent an email to the CT DRS asking for clarification of this agreement between them and AirBnB and who is paying the 15% room tax… us or them. This is the reply I received:

Thank you for contacting the Department of Revenue Services. This is a general information e-mail in response to your recent inquiry.

If all rental transactions are handled through AirBnB, then you would not need to register your business to collect Room Occupancy tax with the Department of Revenue Services.

AirBnB will report gross receipts from the rental of your room(s) and the tax collected on their Room Occupancy tax return. The host does not collect sales tax on the transaction.

PS 2003 (1), Application of Sales and Use Taxes and the Room Occupancy Tax to the Hotel and Motel Industry explains in part:

The Room Occupancy tax is imposed on a transfer for consideration of the occupancy of any room or rooms in a hotel, motel or lodging house for 30 consecutive calendar days or less.

If you meet the definition of hotel, motel or lodging house, you are responsible for reporting the gross receipts for all the other lodging not related to AirBnB and the tax due on those gross receipts when filing your Room Occupancy Tax Return.

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So suggest you determine the State of Ct. definition of “lodging house”. You are certainly not a hotel or motel. There should be a definition that you can find on line by searching Ct statutes. Before allowing these taxes just make sure that Ct. government actually is owed them.

What does “register your business with DRS” mean?

Regards, Curt

This article has more information on the agreement:

DRS stands for Department of Revenue Services, the agency that collects all state taxes for Connecticut. All businesses are required to register with DRS, obtain a tax # and report/pay sales tax and other taxes as may be levied based on what they do. Same for all states, I’m sure.

What’s interesting in Connecticut is the local towns and cities cannot levy their own tax as is done in many other states. Therefore, we have only the one 15% “room tax” (which will be deducted from the guest fee and paid to DRS by AirBnB… it seems) plus income tax on what we may take in.

Even though I am a WSJ subscriber I could not access the article. Do you rent out your entire house and again what does it mean to “register”?

Regards, Curt

That’s odd. I am not a subscriber and it comes up fine when I tap the link.

Google search for “Sullivan Connecticut agreement Airbnb” and you will see various stories. One should work.