short term vacation home rental - vbro?

[mac91red]

Hello,

My family is in the process of buying a home in the smoky mountain area that is currently doing very well as a vacation home on VBRO.  We live out of state and plan to enjoy the property a month or so a year.  Originally we anticipated having a property management company manage the property for us however b/c it has done well for 4 years running with the current owner/vbro it has built a very good following/repeat business.  My wife works very part time as a freelance photographer so we now leaning towards managing the property ourselves.  The current owner is going to share their vendors/clients prior to closing.  As this is our first time taking on this challenge is there any advice anyone would share?  Things i'm not confident on are items like rental agreements, taxes to charge, and the cadence of communication with guests.  I've booked with VBRO for a few trips so i know there is process of partial payment, full payment, then refund of damage deposit but not sure how all that is initiated from the owners perspective.

Appreciate any help we can get on this.

[Bill76]

We're actually going through the same process right now. I'm not a tax expert, and this is NOT legal or tax advice, but here is what I've figured out to this point.

First, you need to register as a business with the state of Tennessee and the local jurisdiction. You don't need to be an LLC or anything.
You also need to register to pay state franchise and excise taxes (annual business tax).
You have to register with the state for sales tax collection (9.75%).
Lodging taxes are 3%, filed and paid monthly. If you're in Sevierville, Pigeon Forge, or Gatlinburg city limits, you pay to the city. If you're outside those towns, you pay to Sevier County.
The city of Gatlinburg also charges a Gross Receipts tax, of (I think) 1.25%, filed and paid monthly. I'm not sure if the other towns in the county do the same.

Here are a couple of web pages that might help:

https://secure.tennesseetrustee.org/index.php?entity=SEVIER&state=TN&page=93
http://gatlinburgtn.gov/finance/finance-department.html

VRBO doesn't collect or remit taxes for you. So you would need to add a 12.75% tax rate to your listing (14% if you're inside the Gatlinburg city limits).
Airbnb collects and remits state sales tax for you, so you'd just need to deal with the business registration, franchise and excise taxes, lodging taxes, and gross receipts taxes.

It's more complex than I thought before we dove in, but I think it won't be too bad once we get it set up over the next few weeks.

[mac91red]

Appreciate that.  I didn’t know VBRO didn’t remit though I’m not surprised.  I noticed when looking at other rentals around me that they are at the 12.75 for tax.  Thanks for the breakdown!