Utah Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Utah?

Short-term rental regulations in Utah vary by city and county, with rules often found in zoning codes, planning ordinances, and business licensing requirements. While some areas are quite welcoming to vacation rentals, others have strict limitations or outright bans. Here's an overview of the short-term rental landscape in Utah, with specific examples from major markets.

Starting a Short-Term Rental Business in Utah

To legally operate a short-term rental in Utah, hosts must typically:

Check zoning laws: Verify that short-term rentals are allowed at your property's location. Zoning rules vary widely - Salt Lake City prohibits STRs in most residential areas, while St. George only allows them in designated resort zones.

Obtain licenses and permits: Apply for a business license from the city and a state sales tax ID from the Utah Tax Commission. Some cities like St. George also require a specific STR permit.

Pass inspections: Many cities require a health and safety inspection of the STR property. For example, St. George mandates a fire department inspection, with occupancy limits and sprinkler requirements based on the International Building Code.

Secure insurance: Obtain liability coverage of at least $1 million, as required by the Utah Short-Term Rental Act. Provide proof of insurance when applying for licenses.

Designate a local contact: Provide guests with 24/7 contact info for a local property manager who can quickly resolve any issues that arise. Post this info prominently in the rental unit.

Collect lodging taxes: STRs must collect state and local transient room taxes from guests, which range from 10-13% depending on the county. Hosts are responsible for remitting these taxes to the proper authorities monthly or quarterly.

Short-Term Rental Licensing Requirements in Utah

To legally operate a short-term rental (STR) in Utah, hosts must obtain a business license from their city or county. The specific requirements and application process vary by jurisdiction, but generally include the following steps:

Register with the Utah State Tax Commission: Obtain a sales tax ID number to collect and remit state and local taxes. Submit the TC-62 form online or by mail. There is no fee for registration.

Obtain a business license from your city or county: Contact your local business licensing office for application requirements, which typically include:

• Completed application form
• Proof of ownership or lease agreement
• Floorplan sketch and parking diagram
• Local property manager contact info
• Proof of insurance ($500K-$1M liability minimum)
• Signed affidavit agreeing to STR rules and restrictions
• Application fee ($100-$500 depending on location)

For example, Salt Lake County requires an application detailing the number of rooms, occupancy limit, parking plan, and 24/7 contact info. The fee is $250 for a new license, plus a $32 processing charge.

Pass inspection: Many cities require a health and safety inspection of the STR property. In Washington County, an inspection is required for license approval, with a $160 fee that covers the inspection cost. The inspection may be waived for new construction that has already passed all building permit inspections.

Post license and contact info: Once approved, hosts must prominently display their STR license and property manager contact info inside the rental unit.

The licensing process typically takes 2-4 weeks, though some cities like St. George have a 6-month waiting period for new applications. License renewal is usually required annually, with a renewal fee.

Failure to obtain an STR license can result in hefty fines and legal action. In St. George, operating an unlicensed STR carries a fine of $750 per violation, with each day considered a separate offense. Repeat violations can lead to criminal charges. Salt Lake County imposes fines up to $1000 per offense for unlicensed rentals.

To avoid penalties, it's critical for Utah STR hosts to carefully research their local licensing requirements and maintain compliance. Cities and counties often dedicate significant resources to finding and cracking down on illegal STRs. As the industry evolves, hosts should stay informed about any regulatory changes that could impact their business.

Required Documents for Utah Short-Term Rentals

To legally operate a short-term rental in Utah, property owners must submit several required documents to their city or county. These typically include:

Business License Application: Submit a completed business license application to the city where the STR is located. This form collects key information about the owner, property address, local contact person, and compliance with regulations.

Proof of Ownership: Provide a copy of the property deed or title listing the applicant as the current owner. This verifies the applicant has the legal right to use the property as an STR.

Floor Plan: Submit a detailed floor plan clearly defining the area to be used for the STR, including bedrooms, bathrooms, and living spaces. This helps verify compliance with occupancy limits and building codes.

Site Plan: If required parking is located on-site, submit a site plan showing the parking location and configuration. Adequate off-street parking is commonly required.

Proof of Insurance: Obtain liability coverage of at least $500K-$1M, as required by the Utah Short-Term Rental Act. Provide proof of insurance to the city as part of the license application.

Affidavit of Compliance: Sign an affidavit certifying the property has no restrictive covenants, HOA rules, or other regulations prohibiting STR use.

Sales Tax License: Register with the Utah State Tax Commission to obtain a sales tax license and number. This is needed to collect and remit state and local lodging taxes.

Property Management Agreement: If using a property manager, submit a copy of the management agreement. The manager's name and 24/7 contact info must be provided.

Good Neighbor Brochure: In some counties like Washington, hosts must display a "Good Neighbor" brochure inside the STR with the license, manager contact info, and rules.

These documents are typically submitted to the city or county's business licensing division, either online, by mail or in person. Application fees vary but are generally a few hundred dollars.

Failure to submit required documents and obtain an STR license can result in significant fines and legal penalties. For example, operating an unlicensed STR in St. George carries a fine of $750 per violation, with each day considered a separate offense.

To avoid costly mistakes, Utah STR hosts should carefully review their local licensing requirements and ensure they have all necessary paperwork before welcoming guests. Following the law protects hosts, guests, and the wider community.

Utah Short-Term Rental Taxes

Short-term rental operators in Utah are required to collect and remit several types of taxes on their rental income. These taxes help support local services, infrastructure, and tourism promotion. Here's a breakdown of the primary taxes that apply to short-term rentals in Utah:

Utah Combined Sales Tax: 5.95-8.35% of the listing price, including cleaning fees and guest fees for reservations of 29 nights or shorter. This tax consists of:

1. State sales tax: 4.7%
2. County option sales tax: 0.25%
3. Additional local option taxes that may apply depending on the location

Utah State Transient Room Tax: 0.32% of the listing price, including cleaning fees and guest fees for reservations of 29 nights or shorter.

Local Transient Room Taxes: These vary by city and county, typically ranging from 3% to 6.25% of the listing price. They may include:

1. County Transient Room Tax
2. Municipal Transient Room Tax
3. Tourism Transient Room Tax

Resort Communities Tax: Up to 1.6% in certain resort areas.

Salt Lake County Tourism Tax: An additional 0.5% tax on temporary lodging in Salt Lake County.

The total tax rate for short-term rentals in Utah can range from approximately 9.57% to 16.42%, depending on the specific location of the property.

Tax Collection and Remittance

Short-term rental operators are responsible for collecting these taxes from guests and remitting them to the Utah State Tax Commission. Hosts must register with the Tax Commission to obtain a sales tax ID number before they can begin collecting and remitting taxes.

Possible Write-offs and Deductions

While short-term rental income is subject to these taxes, hosts may be able to deduct certain expenses associated with operating their rental. Some potential deductions include:

1. Cleaning and maintenance costs
2. Utilities (proportional to rental use)
3. Property insurance
4. Mortgage interest (proportional to rental use)
5. Property taxes (proportional to rental use)
6. Depreciation of the property and furnishings
7. Advertising and marketing expenses
8. Supplies for guests
9. Professional fees (e.g., accountant, lawyer)
10. Travel expenses related to managing the rental

It's important to note that the ability to claim these deductions may depend on how often you rent out the property and whether you also use it for personal purposes. Hosts should consult with a tax professional to ensure they're maximizing their deductions while remaining compliant with tax laws.

Remember that tax laws and rates can change, so it's crucial for short-term rental operators in Utah to stay informed about current regulations and consult with tax professionals to ensure full compliance.

Does Utah Strictly Enforce STR Rules? Is Utah Airbnb Friendly?

Based on discussions among short-term rental hosts on forums like Bigger Pockets and Reddit, Utah's enforcement of STR rules varies significantly across the state, with some cities being much stricter than others. Overall, Utah cannot be considered uniformly Airbnb-friendly due to the patchwork of regulations and enforcement practices.

Salt Lake City stands out as having particularly strict enforcement of its STR ban in residential areas. The city actively investigates complaints and has recently invested in new data-gathering software to identify illegal rentals more effectively. One Reddit user reported that Salt Lake City is "definitely not messing around" when it comes to short-term rental enforcement, with the city monitoring listing sites to catch violators.

In contrast, some other Utah cities and counties are more permissive. For example, Summit County (home to Park City) allows short-term rentals in many areas with proper licensing. However, even in more Airbnb-friendly locations, hosts report that regulations and enforcement have been tightening in recent years.

St. George is known for having some of the toughest STR regulations in Utah. Hosts on Bigger Pockets warn others not to attempt operating Airbnbs in St. George's restricted zones, as the city actively monitors listing sites and issues steep fines for violations. One host reported receiving a cease-and-desist notice just days after posting a listing in a prohibited area.

Despite the rules, many hosts do operate STRs illegally throughout Utah. A Salt Lake Tribune investigation found dozens of unlicensed Airbnb listings in areas where they are prohibited1. Hosts on Reddit acknowledge that some people run "under the radar" rentals, but stress that it's a risky proposition given increasing enforcement efforts.

The general consensus among Utah hosts on online forums is that while it's possible to operate STRs in some parts of the state, it's becoming increasingly difficult to do so legally in many areas. Most advise thoroughly researching local regulations and obtaining proper licensing before listing a property. Those considering operating illegally are strongly cautioned about the risks of fines, legal action, and being forced to shut down.

In summary, while Utah as a whole isn't considered particularly Airbnb-friendly compared to some other states, the situation varies greatly by location. Hosts emphasize the importance of understanding and complying with local rules, as many cities are ramping up enforcement efforts against illegal rentals.

How to Start a Short-Term Rental Business in Utah

Starting a short-term rental business in Utah requires careful planning and adherence to local regulations. Here's a step-by-step guide to help you get started:

Research local regulations

1. Thoroughly investigate the STR rules in your specific city and county. Check zoning laws, licensing requirements, and any restrictions on short-term rentals. Some areas like Salt Lake City prohibit STRs in most residential zones, while others like Summit County are more permissive.
2. Tip: Contact your local city planning department directly for the most up-to-date information.

Choose a suitable property

• Select a property that complies with local STR regulations and has potential for good returns. Consider factors like proximity to attractions, parking availability, and neighborhood character.
• Tip: Look for properties in areas specifically zoned for short-term rentals to avoid potential legal issues.

Obtain necessary licenses and permits

• Apply for a business license from your city or county. You'll also need to register for a sales tax ID with the Utah State Tax Commission.
• Tip: Budget for application fees and allow several weeks for processing. Some cities have waiting periods for new STR licenses.

Secure proper insurance

• Obtain liability insurance with at least $1 million in coverage, as required by Utah law. Consider additional short-term rental insurance to protect your property and business.
• Tip: Shop around for policies specifically designed for STRs, as standard homeowners insurance often doesn't cover rental activities.

Prepare your property

• Ensure your property meets all safety requirements, including smoke detectors, fire extinguishers, and clearly marked exits. Furnish and decorate the space to appeal to your target guests.
• Tip: Consider hiring a professional interior designer to create an attractive, functional space that stands out in listing photos.

Set up your business structure

• Decide on a business structure (e.g., LLC, sole proprietorship) and set up separate bank accounts for your STR business. Consult with a tax professional about the best structure for your situation.
• Tip: An LLC can provide personal liability protection and potential tax benefits for STR operators.

Create a management plan

• Develop systems for guest communication, cleaning, maintenance, and handling emergencies. Decide whether to self-manage or hire a property management company.
• Tip: If self-managing, invest in property management software to streamline bookings and guest communication.

List your property

1. Create detailed, attractive listings on platforms like Airbnb and VRBO. Include high-quality photos, accurate descriptions, and clear house rules.
2. Tip: Consider hiring a professional photographer to showcase your property in the best light.

Set up tax collection and remittance

1. Implement a system to collect and remit all required state and local taxes, including sales tax and transient room tax.
2. Tip: Some booking platforms can automatically collect and remit certain taxes for you, but verify which ones you're still responsible for handling directly.

Market your rental

1. Develop a marketing strategy to attract guests. This might include social media promotion, creating a website, or partnering with local tourism organizations.
2. Tip: Encourage satisfied guests to leave reviews, as positive feedback can significantly boost your listing's visibility and appeal.

Stay compliant and updated

1. Regularly review and comply with all local regulations, tax requirements, and platform policies. Stay informed about any changes in STR laws or market conditions.
2. Tip: Join local host associations or online forums to network with other STR operators and stay updated on industry trends and regulatory changes.

By following these steps and staying diligent about compliance, you can establish a successful and legal short-term rental business in Utah. Remember that the STR landscape is constantly evolving, so flexibility and ongoing education are key to long-term success.

Who to Contact in Utah about Short-Term Rental Regulations and Zoning?

For inquiries about short-term rental regulations and zoning in Utah, it's best to contact your local city or county planning department directly, as rules vary widely by location. However, here are some key contacts in major Utah markets:

Salt Lake City

• SLC Planning Division: 801-535-7700 or zoning@slc.gov
• Building Services (for permits, inspections, complaints): 801-535-6000 or building.services@slc.gov

Park City

• Planning Department: 435-615-5060
• Business Licensing (for nightly rental licenses): 435-615-5500 or nightly_rental@parkcity.org

Washington City

Community Development Department: 435-656-6300 or letusknow@washingtoncity.org

Logan

• Planning Division: 435-716-9023 or 435-716-9036
• Business Licensing: 435-716-9230 or businesslicense@loganutah.gov

At the state level, the Utah State Tax Commission can assist with sales tax collection and remittance: 801-297-2200 or www.tax.utah.gov.

In addition to official government contacts, Utah short-term rental hosts may find it helpful to connect with others in online forums and communities. Some active groups include:

• Bigger Pockets Utah Airbnb Hosts Forum: www.biggerpockets.com/forums/530-utah-airbnb-hosts
• Airbnb Hosting Forum for Utah: www.airbnbhostsforum.com/c/united-states/utah
• Utah Short Term Rental Alliance: www.utahstra.org
• Utah Vacation Rental Managers Association: www.uvrma.org

These forums can be great resources for asking questions, sharing experiences, and staying up-to-date on regulatory changes impacting short-term rentals in Utah. However, always verify any information with official sources before making decisions about your rental business.

Lastly, consider joining national advocacy organizations like the Short Term Rental Advocacy Center (www.stradvocacy.org) or the Vacation Rental Management Association (www.vrma.org). These groups work to protect the rights of short-term rental operators and can provide valuable industry insights and support.

What Do Airbnb Hosts in Utah on Reddit and Bigger Pockets Think about Local Regulations?

Hosts in Utah have shared a variety of experiences and opinions about local short-term rental regulations on online forums. Here are some key insights from verified Utah threads:

Salt Lake City Enforcement

A Reddit user in r/SaltLakeCity reported: "We didn't know our neighbors behind us were doing it until there was an all night party every weekend with music and fireworks over the summer. We called the cops once they hit noise ordinance hours and the parties stopped. Call your code enforcement too!" This experience highlights the challenges some neighborhoods face with illegal short-term rentals and the importance of enforcement.

St. George's Strict Stance

On Bigger Pockets, a host warned others about St. George's aggressive enforcement: "The city is definitely not messing around when it comes to short-term rental enforcement. They actively monitor Airbnb and other listing sites to identify illegal rentals." This comment reflects the city's reputation for being one of the toughest in southern Utah for short-term rentals.

Operating "Under the Radar"

Despite strict regulations in some areas, a few hosts admit to operating illegally. One Bigger Pockets user shared: "I know some people still run 'under the radar' in St. George, but it's really risky. The fines are steep if you get caught." This highlights the risks some hosts are willing to take in areas with strict regulations.

Challenges in Salt Lake County

A host on Reddit discussed the difficulties of operating legally in Salt Lake County: "I applied for a license in South Salt Lake and was basically told they 'didn't want my kind' because short-term rentals compete with hotels. It's frustrating when you're trying to follow the rules." This experience underscores the challenges hosts face even when attempting to comply with regulations.

These experiences and opinions from Utah hosts and residents demonstrate the complex and often contentious nature of short-term rental regulations in the state. While some hosts struggle with strict enforcement and limited opportunities to operate legally, others express concerns about the impact of short-term rentals on their neighborhoods and local housing markets.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each area and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.