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TSD 435
Short-Term Leases and Rentals of Real Property
TSD 435 | Short-Term Leases and Rentals of Real Property
Rev. March 2023 | West Virginia Tax Division
For more information, you can:
• Call a Taxpayer Services Representative at
(304)558-3333 or toll-free at (800) 982-8297
• Email [email protected]
• Go Online to tax.wv.gov
A West Virginia New Business Registration Application, WV Bus-App, is required for each physical location in this state that a
taxpayer will lease or rent to a third party. The new business registration application is available on the Division’s website at
tax.wv.gov. The application may be led through the Business for West Virginia Website at business4.wv.gov or by ling a
signed hard copy with the Tax Commissioner.
A separate business registration certicate is needed for each location in this state from which the business engages with the
public or a segment of the public. As a result, a separate application for each business name or ofce is necessary. However,
a certicate for each rental building is not required. The determination on if a business registration certicate is needed
depends on factors such as where operational records are kept or where business operations are conducted.
West Virginia sales and use tax of 6% is due on taxable rentals. Additionally, when the rental unit is located within a
municipality that imposes a sales and use tax, that tax must also be collected. A list of municipalities who impose sales and
use taxes is posted on our website at tax.wv.gov
Short-term rentals are often booked through online marketplaces, such as AirBnB, VRBO, HomeAway or similar sites. If state
and municipal sales tax on a rental is collected by and through a marketplace facilitator, it does not need to also be collected
and remitted by the owner or manager of the unit.
Collection of State Sales and Use Taxes
Payment of Sales and Use Taxes for Purchases for Use in Business
The business must pay state and municipal sales and use taxes when it purchases tangible personal property for use or
consumption in its short-term rental business activity. Tangible personal property or items used to maintain the property are
subject to the sales and use tax, such as cleaning services, furniture, or repair and maintenance services. Only when the
short-term rental business purchases tangible personal property for resale to its customers in a transaction that is subject to
sales tax, is the purchase of those items by the short-term rental business exempt from sales and use tax as a purchase for
resale. For example, the purchase of souvenirs for resale would be exempt from use tax when purchased by the business
because the resale of the souvenirs to consumers would be subject to sales and use tax.
Business Registration Certicate
If you own short-term rental property, such as a hotel, house, apartment, cabin, campsite, condominium, room, or
time-share, any rental of a unit of that property for less than 30 consecutive days is considered taxable activity.
As such, a taxpayer is required to obtain a business registration certicate from the West Virginia Tax Division and
comply with the tax laws of this State.
Additionally, the rental may be subject to county and municipal hotel occupancy taxes
that are collected and remitted directly to the county or municipality imposing the tax. The
rate of the hotel occupancy tax may not exceed 6% of the price charged to the customer.
This publication provides general information and is not meant to be a substitute for tax laws or regulations.
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Business property, including both real and tangible personal property, is generally taxed as Class III or Class IV
property, depending upon whether the property is located within or outside a municipality. The business property will
be taxed as Class III property if located outside a municipality, or as Class IV if located within a municipality.
Owner-occupied residential real property is taxed as Class II property and is generally taxed at half the rate of tax
imposed on Class IV property. Owner-occupied residential real property may also be eligible for the senior citizens/
permanently disabled persons homestead property tax exemption.
TSD 435 | Short-Term Leases and Rentals of Real Property Rev. March 2023 | West Virginia Tax Division
Property Taxes
Real property is subject to State and local ad valorem property taxation. Real property is classied as either Class II, Class III,
or Class IV property. The classication of property for property tax purposes is important when the levy rates are applied to
the assessed value of the property to arrive at the property tax due.
Computation of the West Virginia personal income tax begins with the taxpayer’s federal
adjusted gross income for the taxable year. In general, the short-term rental of real
property is treated as a business activity for federal income tax purposes and would be
included in federal adjusted gross income making it subject to West Virginia personal
income tax. If a dwelling unit is a residence and rented for fewer than 15 days, an
exception may apply so the receipts from the rental would not be subject to federal
income tax. See IRS Topic Number 415 – Renting Residential and Vacation Property. If
this exception is applicable for federal income tax purposes, it is also applicable for West
Virginia income tax purposes. However, this exception does not apply for purposes of
any other tax imposed by the State or any political subdivision thereof.
Personal Income Tax
If the rental property is located in a municipality, the business may need to obtain a business license from that municipality.
The property may also be subject to land use and other laws of that municipality.
If the rental property is located in a municipality that imposes a business and occupation tax, gross rental income may be
subject to municipal business and occupation taxes. West Virginia has 234 municipalities and approximately half of them
impose a business and occupation tax. For a list of municipalities, effective dates and rates, visit our website at tax.wv.gov
Additional Information
If the short-term rental
property is owned by a
corporation, the
corporation is subject to
the corporation net
income tax.
If owner-occupied residential property is also used for business purposes such as the short-term rental of rooms, the property
may no longer be treated as Class II property and the homestead exemption may be lost. In order to avoid this issue, the
owner of the property may ask the assessor of his or her county to split list the property for property tax purposes. When split
listing occurs, the square footage of the portion taxed as owner-occupied residential real property will continue to be taxed as
Class II property and that portion will be eligible for the senior citizens/permanently disabled persons property tax homestead
exemption, if applicable. The square footage of the property used for business purposes will be taxed as Class III or IV
property, depending upon whether the real property is located within or outside the boundaries of a municipality.
The tangible personal property used in the short-term rental business activity should be reported to the county assessor on
the commercial business property return, which is due on September 1 for the next calendar tax year.
The rental property may need to be in compliance with
the Americans With Disabilities Act, 42, U.S.C. § 121001
et seq. Liability issues should be discussed with an
attorney or insurance company representative.
