Tacoma Short Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short Term Rental Business in Tacoma

Situated along the banks of Puget Sound in Washington state, Tacoma is an attractive destination for travelers seeking a blend of natural beauty, cultural attractions, and urban amenities. With its proximity to Seattle, stunning waterfront views, thriving arts scene, diverse dining options, and charming historic neighborhoods, Tacoma has much to offer visitors.

For property owners looking to capitalize on the growing popularity of short-term rentals, Tacoma can be an appealing market. However, before launching an STR business in the city, it's essential to gain a thorough understanding of the local regulations, licensing requirements, zoning restrictions, and tax obligations to ensure full compliance and avoid potential penalties.

When considering starting an STR in Tacoma, key factors to assess include:

• Zoning and Land Use: Tacoma's zoning code determines where short-term rentals are allowed to operate. STRs are permitted in many residential, commercial, mixed-use, and downtown districts, but there may be specific limitations or additional permit requirements based on the exact zoning designation. Prospective hosts should carefully research the zoning of their property and any applicable land use regulations.
• Type of Rental: The regulatory requirements and restrictions for STRs in Tacoma vary depending on the type of rental being offered. Hosts need to determine whether they will be renting out their entire home, a separate unit such as an accessory dwelling unit (ADU) or guest house, or individual rooms within their primary residence. Owner occupancy rules differ based on the rental type.
• Occupancy Limits: Tacoma sets maximum occupancy limits for short-term rentals based on the Minimum Building and Structures Code. Factors such as the total square footage of the rental, number and size of bedrooms and bathrooms, available off-street parking, and septic system capacity (if applicable) all impact the allowed number of guests. Hosts must adhere to these limits to ensure guest safety and neighborhood compatibility.
• Building and Safety Standards: All short-term rentals in Tacoma are required to meet the relevant building, fire, health, and safety codes for their property type. This includes having working smoke and carbon monoxide detectors, fire extinguishers, clearly marked fire exits and escape routes, adequate lighting and ventilation, and properly maintained electrical, plumbing, and HVAC systems. Hosts should assess their property's compliance and make any necessary upgrades before welcoming guests.
• Neighbor Notification: Tacoma encourages STR operators to proactively communicate with their neighbors about their rental plans. While not a legal requirement, providing nearby residents with contact information and rental details can help foster positive relationships and avoid potential conflicts. Hosts should be prepared to address any neighbor concerns and ensure their guests follow rules regarding parking, noise, trash disposal, and general conduct.

By carefully evaluating their property, rental model, and neighborhood context against Tacoma's STR regulations, prospective hosts can determine the viability and legal pathway for operating a short-term rental. Thorough upfront research and planning can help avoid costly missteps and set the stage for a successful, compliant STR business.

Short Term Rental Licensing Requirements in Tacoma

To legally operate a short-term rental in Tacoma, hosts must obtain the proper licensing from the city. Failure to secure the necessary licenses can result in significant fines, legal action, and the inability to continue renting on a short-term basis.The specific licensing requirements for STRs in Tacoma include:

• City of Tacoma Business License: All individuals or entities engaged in operating a short-term rental must obtain a City of Tacoma business license from the Tax and License Division. This license must be renewed annually and kept in good standing throughout the operation of the STR. Hosts will need to provide basic information about their rental property, ownership structure, and contact details as part of the application process.
• Transient Accommodation License: In addition to the general business license, hosts who plan to rent out three or more individual rooms within their property must also obtain a Transient Accommodation License. This license is specifically for properties operating in a manner similar to a bed and breakfast or small hotel. The transient accommodation license application requires additional documentation, such as a floor plan, safety inspection, and proof of insurance.
• Washington State Business License: Before beginning STR operations, hosts must also register their rental business with the Washington State Department of Revenue. This process will provide the host with a state business license and Unified Business Identifier (UBI) number, which are necessary for tax collection and reporting purposes. Hosts will need to estimate their expected gross annual income from the STR to determine the appropriate state license type.
• Conditional Use Permit: In some cases, particularly for larger STR properties or those located in certain zoning districts, hosts may need to obtain a Conditional Use Permit (CUP) from the Tacoma Planning and Development Services Department. The CUP process involves a more extensive review of the proposed STR use to ensure compatibility with the surrounding neighborhood and adherence to all relevant code requirements. Hosts should consult with city planning staff to determine if a CUP is needed for their specific property and rental model.

The cost and processing time for these licenses vary based on the type of STR and the completeness of the application. Hosts should budget ample time to navigate the licensing process and secure all necessary approvals before listing their property or accepting bookings.

It's important to note that obtaining the required licenses does not guarantee the right to operate an STR indefinitely. The city has the authority to revoke or suspend licenses for properties that generate repeated complaints, violate safety standards, or fail to comply with other STR regulations. Hosts must actively work to maintain their license in good standing by following all rules and promptly addressing any issues that arise.

Required Documentation for Tacoma Short Term Rentals

In addition to obtaining the proper licenses, Tacoma also requires STR operators to maintain certain documentation and provide key information to guests. These requirements are designed to ensure the safety and well-being of renters, as well as to facilitate communication and emergency response if needed.

The specific documentation requirements for STRs in Tacoma include:

• Property Information Posting: Hosts must prominently display the following information inside each rental unit in a location easily accessible to guests:
• The full address of the STR property, including unit number if applicable
• Emergency contact information for requesting police, fire, or medical assistance
• A detailed floor plan that clearly marks all fire exits, escape routes, and the location of fire extinguishers and smoke/carbon monoxide detectors
• The maximum occupancy limit for the unit, as specified by the city
• Contact information for the designated STR operator, including a 24/7 phone number
• Guest Contact Information: Upon check-in, hosts must provide all guests with the STR operator's current phone number and email address to use in case of questions, concerns, or emergencies during their stay. This contact information must be available 24 hours a day, 7 days a week, and the host or their designated representative must be able to respond in a timely manner.
• Safety Equipment and Signage: STRs must be equipped with working smoke detectors, carbon monoxide detectors, and fire extinguishers as required by the relevant building and fire codes. Hosts are responsible for regularly testing and maintaining this equipment to ensure proper functionality. Additionally, properties must have clearly marked signage indicating the location of gas shut-off valves, electrical panels, and fire alarm pulls (if present).
• Rental Records: Tacoma requires STR operators to maintain detailed records of all rental transactions for a minimum of three years. These records must include the dates of each guest's stay, the names of all guests, the amount paid for the rental, and any taxes or fees collected. The city has the right to request and inspect these records to verify compliance with STR regulations and tax obligations.
• Liability Insurance: While not explicitly mandated by the city, it is highly recommended that STR hosts carry appropriate liability insurance coverage for their rental operations. Many standard homeowners or renters insurance policies do not cover commercial use of the property, so hosts should consult with their insurance provider to secure adequate coverage. Some STR platforms like Airbnb and VRBO offer limited liability protection for hosts, but it's important to understand the specific terms and exclusions of these programs.

Failure to maintain and provide the required documentation can result in fines, license suspension, or other penalties. Hosts should develop a system for organizing and updating their STR records to ensure they are always in compliance with the city's requirements.

By providing guests with clear, accessible information about the property, safety procedures, and host contact details, STR operators can help create a positive and secure rental experience. Well-maintained documentation can also serve to protect hosts in the event of disputes, insurance claims, or legal issues related to their rental business.

Tacoma Short Term Rental Taxes

Operating a short-term rental in Tacoma comes with various tax obligations that hosts must carefully manage to stay in compliance with local, state, and federal regulations. The specific taxes that apply to STRs in Tacoma as of 2021 include:

• Sales and Use Tax: The combined sales tax rate for short-term rentals in Tacoma is 12.5%, which consists of the following components:
• Washington State Sales Tax: 6.5% of the rental amount
• Pierce County Sales Tax: 3.0% of the rental amount
• City of Tacoma Sales Tax: 3.0% of the rental amount

Hosts must collect this 12.5% sales tax from guests on all rental transactions and remit it to the appropriate authorities on a monthly or quarterly basis, depending on the volume of their rental income.

• Tacoma Convention Center Tax: In addition to the general sales tax, Tacoma imposes a 7.0% Convention Center Tax on the rental amount for all short-term lodging within the city limits. This tax is used to fund the ongoing operations and improvements of the Greater Tacoma Convention Center. STR hosts are responsible for collecting and remitting this tax along with their regular sales tax filings.
• Tourism Promotion Area Charges: Certain areas of Tacoma have formed Tourism Promotion Areas (TPAs) to support local marketing and tourism development efforts. STRs located within these designated TPAs are required to collect a $2 per night charge from guests and remit it to the city. Hosts should confirm whether their property falls within a TPA and, if so, ensure they are assessing and reporting the nightly charge as required.
• Business and Occupation (B&O) Tax: The state of Washington imposes a Business and Occupation (B&O) tax on the gross receipts of most businesses, including short-term rentals. The B&O tax rate for STRs is 0.471% of gross rental income, and hosts must file and pay this tax on a quarterly basis. Some cities, like Seattle, also have a local B&O tax, but Tacoma does not currently impose one.
• Federal Income Tax: Like any other form of rental income, short-term rental revenue is subject to federal income tax. Hosts must report their total STR income on their annual tax return and pay the appropriate amount based on their tax bracket and filing status. However, hosts can also deduct eligible expenses related to operating and maintaining their rental property, such as cleaning fees, supplies, repairs, and depreciation.

It's important to note that while some STR platforms like Airbnb and VRBO may collect and remit certain taxes on behalf of hosts, the ultimate responsibility for tax compliance lies with the individual operator. Hosts should carefully review the tax collection agreements and practices of their chosen platform to understand which taxes are being handled and which ones they need to manage directly.

To ensure full compliance with Tacoma's STR tax requirements, hosts should:

• Register with the Washington State Department of Revenue to obtain a Reseller Permit and tax reporting account.
• Set up a tax collection and filing system to accurately assess, collect, and remit all applicable taxes on a regular basis. This may involve using STR-specific software or working with a tax professional.
• Maintain detailed records of all rental transactions, income, and expenses for at least three years, as required by the city and state.
• Stay informed about any changes to local, state, or federal tax laws that may impact their STR business and adjust their practices accordingly.

Failure to comply with Tacoma's STR tax regulations can result in audits, fines, interest charges, and legal action. By prioritizing tax management and seeking professional guidance when needed, hosts can minimize their risk and ensure the long-term viability of their rental business.

Tacoma-wide Short Term Rental Rules

Beyond licensing, documentation, and tax requirements, Tacoma has several citywide regulations that apply to all short-term rental properties. These rules are designed to protect public safety, maintain neighborhood character, and ensure a level playing field for all types of lodging businesses.The key STR regulations in Tacoma include:

• Building and Safety Standards: All short-term rentals must fully comply with the relevant building, fire, health, and safety codes for their property type. This includes meeting standards for occupancy, exits, smoke and carbon monoxide detection, fire suppression, electrical and plumbing systems, ventilation, and structural integrity. The city has the authority to inspect STRs to verify compliance and issue fines or revoke licenses for properties with unaddressed violations.
• Occupancy Limits: Tacoma sets maximum occupancy limits for STRs based on the standards in the Minimum Building and Structures Code. The allowed number of guests is determined by factors such as the square footage of sleeping areas, the number and size of bedrooms and bathrooms, available off-street parking, and the capacity of the property's septic system (if applicable). Hosts must not exceed these occupancy limits and must post the maximum number of allowed guests inside the rental unit.
• Owner Occupancy Requirements: The owner occupancy rules for STRs in Tacoma vary depending on the type of rental being offered. For properties where the host is renting individual rooms or a separate unit like an accessory dwelling unit (ADU) or guest house, the owner must maintain the property as their primary residence. This means the owner must live in the main part of the house for at least 6 months of the year. For whole-home rentals where the entire property is being rented, there is no owner occupancy requirement.
• Rental Frequency and Length of Stay: Tacoma does not currently impose any explicit limits on the total number of nights per year that a property can be used as a short-term rental. However, in some zoning districts, there are restrictions on the number of rooms or units within a single property that can be offered as STRs. Additionally, while there is no citywide minimum length of stay for STRs, some zones or property types may have specific requirements. Hosts should consult the zoning code and any applicable overlay districts for their property to understand any rental frequency or length of stay restrictions.
• Parking and Traffic: STR hosts must provide off-street parking for their guests as required by the zoning code for their property type and location. The number of required parking spaces is typically based on the size of the rental unit and the maximum occupancy. Hosts are responsible for ensuring their guests park only in designated areas and do not create traffic or safety hazards in the neighborhood. If a property does not have adequate off-street parking, the host may need to obtain a parking plan approval from the city or limit the number of guests they can accommodate.
• Noise and Nuisance: All STRs are subject to Tacoma's citywide noise ordinance, which prohibits excessive or prolonged noise that disturbs the peace and comfort of neighbors. Hosts must ensure their guests comply with the noise limits and do not engage in disruptive behavior, such as loud parties, music, or activities that generate repeated complaints. STRs must also adhere to the city's nuisance regulations, which cover issues like trash accumulation, overgrown vegetation, and illegal dumping. Hosts are ultimately responsible for addressing any nuisance conditions caused by their rental operations.
• Good Neighbor Practices: Tacoma encourages all STR hosts to be proactive in communicating with their neighbors and establishing good relationships. The city provides a "Good Neighbor" brochure that hosts must share with their guests, outlining expectations for parking, noise, trash disposal, and general conduct in residential areas.

Does Tacoma strictly enforce STR rules? Is Tacoma Airbnb friendly?

Based on the information provided in the search results, Tacoma appears to be relatively friendly to short-term rentals compared to some other major cities, but does have regulations in place that hosts need to follow. Some key takeaways:

• According to city officials, Tacoma currently has no special rules for short-term rentals, and the proposed regulations suggest the city is still very business-friendly to entrepreneurial STR efforts110. This indicates Tacoma allows STRs to operate as long as hosts are properly licensed and follow guidelines.
• Many Airbnb and VRBO hosts report successfully operating STRs in Tacoma without major issues or aggressive crackdowns from the city510. Compared to stricter markets like Seattle, Tacoma is often mentioned as a more STR-friendly alternative for investors.
• However, Tacoma does have a regulatory framework in place and can take enforcement action against problematic STRs if needed1510. The city requires STR operators to obtain business licenses, follow safety and neighborhood compatibility standards, and pay applicable taxes.
• Hosts emphasize the importance of carefully understanding and complying with all of Tacoma's STR requirements to avoid potential fines, license revocation, or legal issues510. Being properly licensed, maintaining safe properties, and being a good neighbor are crucial.

So in summary, while Tacoma allows and accommodates short-term rentals, the city expects hosts to operate responsibly and legally. Regulations seem to be enforced more on a reactive, complaint-driven basis rather than proactive. But the STR landscape could change if significant issues arise, as Tacoma has the laws in place to crack down if needed. Hosts should stay informed and ensure they are fully compliant.

How to Start a Short Term Rental Business in Tacoma

Based on the information provided, here are the key steps to legally start a short-term rental business in Tacoma:

• Check your property's zoning and land use regulations to confirm STRs are allowed and determine any restrictions based on your rental type and neighborhood1412.
• Prepare the space to meet all building, fire, health and safety standards, including working smoke/CO detectors, fire extinguishers, clearly marked exits, and maximum occupancy1412.
• Obtain a City of Tacoma business license from the Tax & License Division1411. If renting 3+ rooms, also get a Transient Accommodation License14.
• Register with the Washington State Dept. of Revenue for a state business license, tax collection, and reporting2111617.
• Understand and follow all Tacoma STR regulations on licensing, taxes, safety, occupancy limits, parking, noise, and good neighbor practices1412.
• Properly assess, collect and remit all applicable state and local taxes, including sales tax, lodging tax, convention center tax, and tourism charges29121617.
• Maintain detailed records of all rental transactions and required documentation for at least 3 years416. Make available to city upon request.
• Provide guests with required safety and local regulation information, plus emergency and owner/manager contact details41216.
• Strongly consider forming an LLC or corporation to limit personal liability, plus secure proper insurance coverage for STR use17.
• Create a detailed listing on Airbnb, VRBO or other platforms and launch your rental. Ensure compliance and great guest service to avoid complaints and issues510.

Hosts should carefully review all requirements, secure proper licensing, and establish systems for compliance and tax collection before launching their STR. Consulting with legal and tax professionals can help navigate the process.

Who to contact in Tacoma about Short Term Rental Regulations and Zoning

The search results provide two key city departments to contact for questions about STR regulations, licensing, zoning, taxes, and enforcement in Tacoma:

Planning and Development Services Department
747 Market Street, Room 345
Tacoma, WA 98402
Phone: (253) 591-5030
Email: planning@cityoftacoma.org
Website: https://www.cityoftacoma.org/government/city_departments/planning_and_development_servicesThe

Planning and Development Services Department handles STR zoning, land use, building and safety requirements, permitting and inspections1412. They can help determine if a property is eligible for STR use and explain any zoning restrictions or additional permit needs.

Tax and License Division
747 Market Street, Room 212
Tacoma, WA 98402
Phone: (253) 591-5252
Email: taxinfo@cityoftacoma.org
Website: https://www.cityoftacoma.org/government/city_departments/finance/tax_and_licenseThe Tax and License Division manages Tacoma's general business licensing and tax collection for STRs12411. They can assist with obtaining required city business licenses, filing tax returns, and understanding STR tax obligations and processes.

Hosts can also find useful information on the city's Short-Term Rentals web page:
https://www.cityoftacoma.org/cms/One.aspx?portalId=169&pageId=120292For state-level requirements, hosts should contact the Washington State Department of Revenue:
https://dor.wa.gov/taxes-rates/other-taxes/special-taxes

What do Airbnb hosts in Tacoma on Reddit and Bigger Pockets think about local regulations?

Unfortunately the search results only contained a couple relevant discussions from Tacoma Airbnb hosts on these popular forums:

• In a Bigger Pockets thread on investing in Tacoma/Seattle area condos for Airbnb, respondents noted that profitability depends heavily on the specific condo rules, fees, and STR restrictions. Houses are often easier for STRs than condos10.
• On a Reddit thread about Tacoma's STR licensing process, hosts shared that it took some time and effort to get licensed but the city was helpful in explaining the requirements. They emphasized the importance of getting properly licensed to operate legally10.
• There weren't many other specific discussions about Tacoma's STR regulations on these forums in the search results provided. More research may be needed to gauge overall host sentiment and experiences.

The limited comments suggest that Tacoma's STR regulations, while present, are workable for hosts who take the time to understand and follow them. The city seems open to legal and responsible STRs. But hosts must do their due diligence to comply, as Tacoma can enforce rules when issues arise.

Continued monitoring of host forums and local news can help track any changes in STR regulations or attitudes in Tacoma. Hosts should connect with other local operators to share knowledge and support. But always confirm current rules with city officials and professional advisors.

In conclusion, while Tacoma has a regulatory framework for short-term rentals, the city currently appears to be more permissive than prohibitive compared to other markets. Hosts who operate legally, safely, and neighborly can likely find success in Tacoma's STR landscape. But as this sector evolves, regulations may change, so hosts must stay informed and adaptable. Careful research, planning and compliance are essential to starting and sustaining a short-term rental business in Tacoma.