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

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

Washington state has seen a surge in short-term rentals through platforms like Airbnb and VRBO in recent years. However, operating a vacation rental comes with various legal requirements that hosts must navigate. This article will explore the key regulations governing short-term rentals in Washington, drawing from zoning codes, planning codes, ordinances, and insights from real estate forums.

Starting a Short-Term Rental Business in Washington

To legally operate a short-term rental in Washington, hosts must first obtain a state business license from the Department of Revenue. This applies to all rentals offered for less than 30 consecutive days. Additionally, hosts must register with their local city or county government, which may have its own licensing and permitting requirements.

For example, the City of Seattle requires short-term rental operators to have both a business license tax certificate and a regulatory license specific to STRs6. The regulatory license costs $75 per unit and is valid for one year. Seattle also limits hosts to operating a maximum of two units, one of which must be their primary residence.

In Snohomish County, short-term rentals are subject to different rules depending on the specific location. The City of Snohomish has a detailed ordinance regulating STRs, which includes obtaining a permit, adhering to occupancy limits, and collecting applicable taxes. Hosts must apply for permits through the MyBuildingPermit.com platform.

Short-Term Rental Licensing Requirement in Washington

To legally operate a short-term rental in Washington state, hosts must obtain the necessary licenses and permits. The specific requirements vary by jurisdiction, but generally include the following based on information from the Washington State Department of Revenue and local government websites:

Business License: All short-term rental operators in Washington must obtain a state business license from the Department of Revenue. This can be done online through the state's Business Licensing Service. The cost for a new business license is $90, and it must be renewed annually. Failure to obtain a business license can result in penalties of up to $150 per day of operation without a license.

Local Permits: Many cities and counties in Washington require additional permits or licenses for short-term rentals. For example:

• Seattle requires a Short-Term Rental Operator's License, which costs $75 per unit annually. Operators must also have a Seattle business license tax certificate. Failure to obtain the required licenses can result in fines of $500 per day.
• Tacoma requires a Short-Term Rental License, which costs $104 per unit annually. Operators must also obtain a Tacoma business license.
• Snohomish County requires a Short-Term Rental Permit, which can be applied for online via the MyBuildingPermit.com platform. The county also requires a business license.

Tax Registration: Short-term rental operators must register with the Washington State Department of Revenue for tax purposes. This involves obtaining a Unified Business Identifier (UBI) number, which is used for filing state taxes. There is no fee for registering, but failure to do so can result in penalties and interest on unpaid taxes.

Liability Insurance: Washington state law requires short-term rental operators to maintain liability insurance of at least $1 million, unless the rental platform (like Airbnb) provides equivalent coverage. Proof of insurance may need to be submitted with license applications.

Safety Requirements: Short-term rentals must meet building codes and safety standards, such as having working smoke detectors, carbon monoxide alarms, and fire extinguishers. Some jurisdictions, like Seattle, require a safety inspection for units that are not the operator's primary residence.

The timeline for obtaining short-term rental licenses and permits varies, but generally ranges from 1-4 weeks. Business license applications are typically processed within 10 business days, while local permits may take longer depending on the jurisdiction1.

To apply for licenses and permits, operators typically need to submit:

1. A completed application form
2. Proof of residency (for primary residence rentals)
3. Proof of liability insurance
4. A safety inspection report (if required)
5. Any applicable fees

Applications can usually be submitted online, by mail, or in person at the relevant state or local agency. For example, state business license applications go through the Department of Revenue, while local permits are handled by the city or county planning department.

Required Documents for Washington Short-Term Rentals

To legally operate a short-term rental in Washington state, hosts must submit the following required documents to their local city or county planning department:

1. Short-Term Rental Permit Application

1. This application provides essential information about the property and its intended use as a short-term rental.
2. It can typically be submitted online through the local government's permitting platform, such as MyBuildingPermit.com in Snohomish County.

2. Business License

• All short-term rental operators in Washington must obtain a state business license from the Department of Revenue.
• Some cities, like Bingen, also require a separate city business license endorsement.
• Business licenses can be applied for through the Washington State Department of Revenue (DOR) website.

3. Proof of Liability Insurance

1. Hosts must submit documentation showing that the short-term rental property is covered by at least $1 million in liability insurance, as required by RCW 64.37.050.
2. This insurance protects both the property owner and guests in case of accidents or damages.

4. Safety Inspection Report

1. Some jurisdictions may require a report from a certified inspector confirming that the property meets all safety standards.
2. This includes verifying the presence of operational smoke and carbon monoxide detectors.

5. Site Plan and Floor Plan

1. A detailed site plan shows the location of the rental unit, parking areas, and any shared amenities. It must be drawn to scale and include all required elements specified by the local planning department.
2. A floor plan labels each room in the rental unit and indicates the maximum occupancy based on the number of bedrooms and size of the unit.

5. Parking Plan (if applicable)

1. If the property has designated parking areas for guests, a parking plan must be submitted showing the location and number of available spaces.
2. This may include photos of interior and exterior parking spaces.

6. Neighborhood Notification

1. Some cities and counties, like Bingen, require proof that neighboring property owners have been notified of the short-term rental.
2. Hosts must complete a standard notification form and provide copies to adjacent neighbors.

7. Good Neighbor Guidelines

1. Certain jurisdictions, such as Bingen, require hosts to submit a copy of the "Good Neighbor Guidelines" that will be provided to each short-term rental guest.
2. These guidelines cover topics like parking, noise, occupancy limits, and quiet hours to promote appropriate vacation rental etiquette.

The specific requirements and submission process may vary depending on the city or county. Hosts should carefully review their local government's short-term rental regulations and consult with the relevant planning department for guidance on preparing and submitting the necessary documents.

By compiling these required documents and obtaining approval from their local jurisdiction, short-term rental operators can ensure compliance with Washington state and local laws while providing safe and legal accommodations for their guests.

Washington Short-Term Rental Taxes

Short-term rental operators in Washington state are subject to various taxes at both the state and local levels. Understanding and complying with these tax obligations is crucial for running a successful and legal rental business. Here's a breakdown of the key taxes that apply to short-term rentals in Washington:

State Sales Tax: Washington imposes a 6.5% state sales tax on all short-term rental transactions. This tax is collected from guests and remitted to the Department of Revenue by the host or the booking platform (like Airbnb or VRBO) on the host's behalf.

Local Sales and Lodging Taxes: In addition to the state sales tax, many cities and counties in Washington charge local sales and lodging taxes on short-term rentals. These rates vary by jurisdiction but can range from 1% to 3.9%. For example, in Snohomish County, the total sales tax rate (including state and local portions) is 9.3%.

Business and Occupation (B&O) Tax: Short-term rental income is subject to Washington's B&O tax, which is a gross receipts tax on business activities. The tax rate for short-term rentals falls under the retailing classification, which is currently 0.471%. However, hosts with less than $90,000 in annual gross rental income may be eligible for a small business tax credit that reduces their B&O tax liability to zero.

Convention and Trade Center Tax: Some localities, like Seattle, impose additional taxes on short-term rentals to fund convention and trade center facilities. As of January 1, 2019, short-term rentals in Seattle are subject to a 7% convention center tax on top of other applicable taxes.

Property Tax: If a property is used as a short-term rental for more than 14 days per year, it may be subject to a higher property tax rate. The Washington Department of Revenue classifies these properties as "transient accommodations" and taxes them at a commercial rate rather than the lower residential rate.

It's important to note that short-term rental platforms like Airbnb and VRBO collect and remit some taxes, like state and local sales taxes, on behalf of hosts in Washington. However, hosts are still responsible for registering with the Department of Revenue and filing regular tax returns to report their rental income and pay any remaining tax obligations, such as B&O taxes.

Possible Write-Offs or Deductions

Short-term rental operators can typically deduct expenses that are ordinary and necessary for running their rental business. Some common deductions include:

• Mortgage interest and property taxes (if the rental is also a personal residence)
• Rental insurance premiums
• Utilities paid by the host
• Cleaning and maintenance costs
• Repairs and supplies
• Depreciation of the rental property and furnishings
• Guest-service fees charged by booking platforms
• Advertising and marketing expenses

Hosts should keep detailed records of all rental-related income and expenses and consult with a tax professional to ensure they are claiming all eligible deductions and complying with tax laws.

By understanding and staying current with Washington's short-term rental tax requirements, hosts can avoid costly penalties and establish a compliant and profitable rental business.

Does Washington Strictly Enforce STR Rules?

Based on discussions among hosts on real estate forums like Bigger Pockets and Reddit, the enforcement of short-term rental regulations in Washington state varies significantly by county and city. Some jurisdictions, like Seattle and King County, are known for having strict rules and active enforcement, while others, such as Pierce and Snohomish Counties, appear to be more lenient.

In King County, particularly in Seattle, hosts report a fairly hostile regulatory environment for short-term rentals. The city has some of the tightest Airbnb rules in the country, and authorities do enforce them. One Reddit user shared their experience trying to evict a tenant in Seattle, noting, "Of all the places I would never want to be a landlord, King County is at the top of the list." Another mentioned their attorney said they were "lucky the house wasn't in King County" when dealing with an eviction in nearby Pierce County. The lack of interest in an "Airbnb arbitrage opportunity" posted on Bigger Pockets further suggests Seattle is not an easy market for STRs.

On the other hand, Pierce and Snohomish Counties are generally seen as more Airbnb-friendly. Hosts on Bigger Pockets have described Pierce County's regulations as "fine" and "not too onerous" for running STRs. A Reddit user shared that Pierce County code enforcement estimates receiving only about 10 STR complaints per year, and compliance with the county's vacation rental affidavit requirement may be as low as 4% in some areas. Similarly, active enforcement seems somewhat limited in Snohomish County, with some hosts admitting to operating without all proper licenses and permits.

However, this does not mean hosts can ignore all rules in these counties. Operating "under the radar" is ill-advised, as it leaves hosts vulnerable to fines and legal issues if authorities do investigate. The prudent approach is to make a good faith effort to understand and comply with all relevant state and local requirements from the outset.

In conclusion, Washington state is not uniformly Airbnb-friendly. The short-term rental landscape is a patchwork of varying regulations and enforcement practices. King County and Seattle are particularly stringent, while Pierce and Snohomish Counties are more relaxed but not a free-for-all. Hosts should carefully research the specific rules in their area and strive for full compliance to minimize legal risks and ensure a smooth operation of their rental business. Attempting to skirt the rules is a precarious approach that could ultimately jeopardize an STR venture.

How to Start a Short-Term Rental Business in Washington

Starting a short-term rental business in Washington state requires careful planning and adherence to various regulations. Here's a step-by-step guide to help you navigate the process:

Research local regulations

• Familiarize yourself with Washington's statewide short-term rental laws, such as the requirement for hosts to obtain a business license and maintain liability insurance.
• Review your county and city's specific short-term rental ordinances, as rules can vary significantly by jurisdiction. For example, Pierce County requires hosts to file a Short-Term Vacation Rental Affidavit, while the City of Snohomish has specific zoning restrictions.
• Consult with local government offices, property management companies, or real estate attorneys to ensure you fully understand and comply with all applicable regulations.

Obtain necessary licenses and permits

• Register your short-term rental business with the Washington State Department of Revenue and obtain a Unified Business Identifier (UBI) number for tax purposes.
• Apply for a business license from your county and/or city, which is required to legally operate a short-term rental. In some cities, like Seattle, you may also need a specific Short-Term Rental Operator's License.
• Gather required documents for licensing, such as proof of residence, property details, and a signed Good Neighbor agreement outlining appropriate vacation rental etiquette.
• Begin the licensing process early, as it may take several weeks to receive approval.

Ensure compliance with safety regulations

• Verify that your rental property meets all building codes, safety standards, and health regulations. This includes providing working smoke detectors, carbon monoxide alarms, fire extinguishers, and adequate means of egress.
• Schedule any necessary inspections with local authorities to certify compliance.
• Maintain a clean and safe environment for guests, following any specific cleaning and sanitation guidelines.

Secure appropriate insurance coverage

• Obtain liability insurance for your short-term rental property, with a minimum coverage of $1 million as required by Washington state law.
• Contact your homeowners insurance provider to discuss adding a short-term rental endorsement or securing a separate vacation rental insurance policy.
• Consider additional coverage options, such as property damage protection and income replacement insurance, to further mitigate risks.

Prepare your property for guests

• Create a welcoming and well-equipped space for guests, including comfortable furnishings, essential amenities, and thoughtful touches.
• Develop a comprehensive property manual with house rules, local recommendations, and emergency contact information.
• Implement a reliable key exchange or access system, such as lockboxes or smart locks, to facilitate smooth check-ins and check-outs.

List your property on short-term rental platforms

• Choose popular booking platforms like Airbnb and VRBO to list your property and reach a wide audience of potential guests.
• Craft an attractive listing with high-quality photos, detailed descriptions, and accurate information about your rental's features and amenities.
• Set competitive rates based on market research and your property's unique value proposition.

Manage your short-term rental business

• Establish efficient systems for handling guest inquiries, reservations, and communication.
• Implement a thorough cleaning and maintenance routine to ensure your property remains in top condition between guest stays.
• Stay up-to-date with any changes in local regulations or tax requirements, and adjust your business practices accordingly.
• Consider partnering with a reputable property management company to handle day-to-day operations and optimize your rental's performance.

By following these steps and seeking guidance from local experts when needed, you can successfully launch and operate a compliant short-term rental business in Washington state. Remember to prioritize guest satisfaction, maintain open communication with neighbors and local authorities, and continually adapt to the evolving regulatory landscape to ensure long-term success.

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

For questions about short-term rental regulations and zoning in Washington state, hosts should contact their local city or county planning department. Here are some key contacts in major jurisdictions:

Seattle Department of Construction and Inspections (SDCI)

1. Phone: (206) 615-0808
2. Email: sci_shorttermrentals@seattle.gov
3. Website: https://www.seattle.gov/sdci/codes/common-code-questions/short-term-rentals

SDCI handles permitting, inspections, and enforcement of Seattle's short-term rental regulations. They can assist with questions about licensing, building codes, and the Rental Registration and Inspection Ordinance (RRIO).

King County Permitting Division

1. Phone: (206) 296-6600
2. Email: DPERWebInquiries@kingcounty.gov
3. Website: https://kingcounty.gov/depts/local-services/permits/short-term-vacation-rentals.aspx

For unincorporated areas of King County, the Permitting Division manages short-term rental regulations and permits. They can provide guidance on zoning, occupancy limits, and other county-specific requirements.

Pierce County Planning and Public Works

1. Phone: (253) 798-3739
2. Website: https://www.piercecountywa.gov/4999/Planning-Public-Works

Pierce County's Planning and Public Works Department handles short-term rental affidavits and assists with zoning and code compliance questions for unincorporated areas of the county.

Snohomish County Planning and Development Services

1. Phone: (425) 388-3311
2. Email: PDS.Short.Term.Rentals@snoco.org
3. Website: https://snohomishcountywa.gov/5782/Short-Term-Rentals

Snohomish County's short-term rental program is managed by the Planning and Development Services Department. They can help with permitting questions and using the MyBuildingPermit.com platform for applications.

In addition to these government contacts, Washington hosts may find the following online communities and resources helpful:

Puget Sound Hosts Forum on Airbnb: https://community.withairbnb.com/t5/Puget-Sound-Hosts/bd-p/Puget-Sound-Hosts

A place for Airbnb hosts in the Seattle and Puget Sound region to connect and share experiences.

Washington State Short-Term Rental Operators Association: https://www.wastroa.org/

A non-profit trade association providing education, advocacy, and resources for the short-term rental community in Washington.

Bigger Pockets Washington State Real Estate Forum: https://www.biggerpockets.com/forums/99/topics/816196-washington-state-str-laws

Discussions among real estate investors about short-term rental laws and regulations in Washington.

By reaching out to local government contacts and engaging with host communities, short-term rental operators in Washington can stay informed about the evolving regulatory landscape and connect with others navigating similar challenges. Building positive relationships with officials and neighbors is key to operating a successful and compliant rental business.

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

Discussions on real estate forums like Bigger Pockets and Reddit provide valuable insights into how Airbnb hosts in Washington perceive the state's short-term rental regulations. Here are some notable experiences and opinions shared by hosts:

Frustration with Seattle's strict rules (Reddit)

1. In the Seattle subreddit, some hosts have expressed frustration with the city's licensing requirements and limitations on the number of units that can be operated. They argue that the regulations can be overly burdensome and may hinder their ability to run a successful short-term rental business.
2. One host questioned how some operators seem to have more than the allowed two properties in Seattle, speculating that they may be using LLCs or property managers to circumvent the rules.

Pierce County's lax enforcement (Reddit)

1. A Reddit user shared that Pierce County code enforcement estimates receiving only about 10 short-term rental complaints per year, with many rentals found not to be in violation of county code upon investigation.
2. Market data from 2023 showed over 1,600 entire homes listed on Airbnb and VRBO in Pierce County, but compliance with the county's Short-Term Vacation Rental Affidavit requirement was estimated to be as low as 4% in some areas.

These experiences and opinions highlight the varied landscape of short-term rental regulations across Washington state. While some jurisdictions like Seattle have strict rules and active enforcement, others like Pierce and Snohomish Counties are seen as more lenient. However, hosts generally recognize the importance of understanding and complying with applicable regulations to avoid potential fines and legal issues.

It's worth noting that the enforcement of short-term rental rules may evolve as local governments evaluate policies to address the growth of the industry. Hosts should stay informed about any changes in their area and seek guidance from experienced professionals to ensure they are operating responsibly and legally.

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.