STRs in Erie County, New York, now subject to occupancy tax

A new law in Erie County, New York, requires short-term rental (STR) guests to pay a 3% occupancy tax on their stays. 

The law levels the playing field with hotels and motels, whose guests were already required to pay occupancy taxes. The occupancy tax for hotels and motels with 30 rooms or less is 3%, while those with more than 30 rooms are subject to a 5% tax. 

The county ordinance includes short-term rentals among the lodging businesses subject to the occupancy tax. The tax does not apply to month-to-month residential leases or other rental agreements in which a tenant occupies the unit as a primary residence. 

Erie County has around 2,000 STRs that operate for at least part of the year, according to Patrick Kaler, President of Visit Buffalo Niagara. It’s estimated that the new tax will generate $1 million to $2 million in revenue, which will be earmarked for local tourism promotion efforts. Most of the funds from the tax will go to the Buffalo Niagara Convention and Visitors Bureau.

The new law went into effect January 4, 2024, and requires STR operators to register with the Erie County Comptroller’s Office, collect the tax from guests, and file quarterly or annual occupancy tax returns. Registered operators must file returns whether or not they’ve collected tax during the filing period. 

County leaders said they expect to reach occupancy tax collection agreements with STR platforms such as Vrbo and Airbnb. However, no agreements have been reached yet, meaning Erie County STR hosts are solely responsible for occupancy tax compliance. All STR operators in the state must also register with the New York State Department of Taxation and Finance and collect and file state lodging taxes.

A growing number of local governments across the U.S. levy lodging taxes on short-term rental stays. Loudoun County, Virginia, passed an ordinance in November 2023 that made short-term rentals with fewer than four bedrooms subject to the county’s 8% tourism tax. That measure followed a similar law in in Richmond, Virginia, that was approved in July 2023. Virginia STRs are also subject to state sales tax, and STR operators must register with the Virginia Department of Taxation and collect and remit state lodging taxes.

In April 2023, voters in Kansas City, Missouri, approved a new tax on STRs, making them subject to lodging taxes for the first time. STR operators are required to register with city tax authorities, collect the tax from guests, file lodging tax returns, and submit the tax to the city. Missouri STR hosts are also required to register with the Missouri Department of Revenue and collect and remit state lodging taxes.

MyLodgeTax can help New York vacation rental hosts automate and simplify lodging tax compliance. For more on short-term rental taxes in New York, see our vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.