Short-term rentals may be controversial in many communities, with residents often divided over their effects on neighborhoods and housing prices. However, there’s no question short-term rentals can be a boon to local communities in terms of tax revenues. State and local governments are increasingly looking to tap this revenue source by imposing lodging taxes on short-term rentals — and making sure those taxes get collected.
So what do governments use short-term rental lodging tax revenue for? The answer varies widely — and governments often don’t designate STR lodging tax money for specific expenditures.
Read on to learn more about these common ways communities spend lodging tax income.
Hospitality and tourism promotion
Affordable housing
Infrastructure
Conservation
Help with lodging tax compliance