In the U.S. Virgin Islands (USVI), short-term rentals (STRs) are subject to specific regulations to ensure compliance and proper taxation.
Definition and Licensing:
A short-term rental is defined as an establishment providing accommodations for less than 90 days in private homes, condominiums, or villas. To operate legally, owners must obtain a business license from the Department of Licensing and Consumer Affairs (DLCA). There are two categories:
- Short Term Rental A: For properties accommodating five or more guests; annual fee of $260.
- Short Term Rental B: For properties accommodating up to four guests; annual fee of $195.
The licensing process involves submitting an application, undergoing a police record check, obtaining zoning approval, passing a fire inspection, and securing tax clearance from the Virgin Islands Bureau of Internal Revenue (VIBIR).
Taxation:
STR operators are required to collect a 12.5% Hotel Room Occupancy Tax from guests. Platforms like Airbnb have agreements to collect and remit this tax on behalf of hosts. For bookings through other platforms, hosts must handle tax collection and remittance themselves.
Compliance and Enforcement:
Operating without the appropriate license can result in fines and penalties. The DLCA emphasizes that these regulations aim to ensure fair taxation and adherence to local laws.
Additional Considerations:
Hosts should also be aware of any restrictions imposed by homeowners associations (HOAs) or local zoning laws, as some may prohibit or limit short-term rentals. It's advisable to consult with local authorities or legal professionals to ensure full compliance with all applicable regulations.
For detailed information and guidance, property owners should refer to the DLCA's official communications and resources.