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Attorney Warns: Don't Forget Summer Rental "Use" Tax

www.mlive.com

Summer is in full swing now and many Michiganders, including those here in West Michigan might be thinking about or already renting out homes or cottages.  You might be using popular services, such as AirBnb, Home Away or VRBO.  But one local tax attorney is issuing a warning to all those who rent their spaces out.  She says don’t forget about the state’s sales and use tax .

“Regardless of whether you’re going through one of the third party providers or you’re doing short term rentals on your own, you are responsible to pay the use tax.”

Tax Attorney, Andrea Crumback, with the Mika Meyers Law firm says many Michiganders who are renting out their summer cottages or perhaps even a room in their home, may not be aware of the rules for summer rentals as imposed by the State of Michigan. 

“I think as time goes by, Michigan residents will be more and more aware of what requirements are. But this is a new trend.  There are going to be people out there who aren’t aware of it at this particular time.”

Attorney Crumback says the six percent “use tax” applies to rentals of 30 days or less. And with services such as Airbnb, HomeAway or VRBO becoming more popular, those that choose to rent out a space, whether it’s a vacation home, cottage, cabin, lodge, condo or even a room in a private residence, you need to take note to avoid penalties or fines.

“Those penalties vary, state determines what they are.  There’s a website that explains. The best thing to do is register with the State of Michigan if you’re doing short term rentals. Then the state keeps track and you fill out report and tax monitoring that allows you to easily file your report.”

Attorney Crumback adds Michigan is not the only state requiring the use tax.  She says  the majority of states charge some sort of tax, with the idea being to level the playing field with hotels, so that everyone is subject to the same rules and regulations.  

Again, Crumback says the big thing to remember is that whether you chose to charge the tax to those you rent to or not, you’re responsible for the Sales and Use Tax in our state.

Jennifer is an award winning broadcast news journalist with more than two decades of professional television news experience including the nation's fifth largest news market. She's worked as both news reporter and news anchor for television and radio in markets from Grand Rapids and Kalamazoo all the way to San Francisco, California.