Wisconsin Provides Guidance on Lodging Marketplace Tax Duties

Wisconsin has issued a bulletin with guidance on tax responsibilities for persons offering short-term lodging through third-party websites (such as Airbnb and VRBO). If an individual provides short-term lodging in Wisconsin, he or she must collect and remit Wisconsin sales tax on such sales if they hold a Wisconsin seller’s permit or taxable sales for the calendar year exceed $2,000. However, if the third-party website meets the definition of lodging marketplace and has nexus with Wisconsin, the third-party website is required to register with the department for a lodging marketplace license. “Lodging marketplace” means an entity that provides a platform through which an unaffiliated third-party offers a short-term residential rental to an occupant and collects the consideration for the rental from the occupant.

In addition to registering for a lodging marketplace license, a lodging marketplace is required to collect and remit Wisconsin sales and use taxes and any applicable local room taxes from the purchaser. The lodging marketplace must notify the individual offering short-term lodging that the taxes have been collected and remitted. If the third-party website is not required to collect tax or is required to collect tax and fails to do so, the individual providing short-term lodging is responsible for reporting and paying the taxes. (Tax Bulletin No. 201, Wisconsin Department of Revenue).

Posted on July 30, 2018