The Complete Connecticut Airbnb Host Lodging Tax Guide: Airbnb Connecticut Occupancy Tax Breakdown

Connecticut imposes specific lodging and occupancy taxes on short-term rentals (STRs), including Airbnb listings. These taxes vary depending on the location of your rental property, and understanding them is crucial for compliance. Today, we break down the general statewide requirements and highlight unique tax regulations in specific counties and cities across Connecticut.

State-Wide Tax Requirements for Connecticut Airbnb Hosts

Connecticut imposes a statewide room occupancy tax of 15% on the total payment received for the rental of any room or rooms in a hotel, lodging house, or bed and breakfast establishment for up to 30 consecutive calendar days. This tax applies to all charges associated with the occupancy, including accommodations, amenities, and services, whether separately stated or included.

In addition to the room occupancy tax, short-term rentals in Connecticut are subject to the state's 6.35% sales and use tax on the total rental rate, including any cleaning or service fees paid by guests.

Example:

• Nightly Rate: $150
• State Room Occupancy Tax (15%): $22.50
• Sales and Use Tax (6.35%): $9.53
• Total Charge: $182.03

County and City-Specific Tax Requirements

Most cities within Connecticut only follow the 15% State Room Occupancy Tax policy. However, there are a handful that have also added their own tax policies that apply to Airbnb hosts and short-term rental owners.

New Haven

New Haven imposes a 6% local occupancy tax on rentals of less than 30 days. This is in addition to the other taxes that are applicable to Connecticut hosts. The New Haven tax brings the total to 27.35%.

Example:

1. Revenue: $1,000
2. State Room Occupancy Tax (15%): $150
3. Sales and Use Tax (6.35%): $63.5
4. Local Occupancy Tax (6%): $60
5. Total Taxes (27.35%): $273.5
6. Net Revenue: $726.5

New London

New London is annother Connecticut city that imposes an additional local occupancy tax. This time, it’s a 3% tax on top of the Connecticut State Tax and Sales and Use Tax. Overall, this brings the tax rate up to 24.35%.

Example:

1. Revenue: $1,500
2. State Room Occupancy Tax (15%): $225
3. Sales and Use Tax (6.35%): $95.25
4. Local Occupancy Tax (3%): $45
5. Total Taxes (24.35%): $365.25
6. Net Revenue: $1,134.75

Hartford

Hartford hosts are subject to an extra hotel tax. The 7% hotel tax on short-term rentals applies to rental contracts for 30 consecutive calendar days or less. In total, Hartford short-term rental owners must pay 22% in taxes to Connecticut and the city.

Example:

1. Nightly rate: $150 × 2 nights = $300
2. Cleaning fee: $50
3. Total rental charges: $350
4. State occupancy tax: $350 × 15% = $52.50
5. Hartford hotel tax: $350 × 7% = $24.50
6. Total taxes: $77.00
7. Total guest payment: $427.00

Wrapping Things Up

Understanding and complying with tax obligations is a crucial aspect of running a successful short-term rental business in Connecticut. While the 15% state occupancy tax is a bit steep, paying it, along with any extra local taxes, will help you avoid potential penalties and position your rental business for long-term success.

Remember that tax laws and rates can change, so regularly review your tax obligations to stay current with all requirements. Check out the official Connecticut Department of Revenue Services website for updated information.