Occupancy Taxes on Short Term Rentals
The Village of Bald Head Island collects occupancy taxes on the cost of short-term rentals such as hotels, bed and breakfast inns, and vacation homes. A short-term rental is defined as any accommodation that is rented for less than 90 days to the same person but does not include a property rented for less than 15 days during the calendar year which has not been listed with a rental agency.
The rate of collection is 6% of the gross rental fee collected and is inclusive of additional fees charged to the rental guest. For a list of the additional fees subject to occupancy taxes, please click here. (Fees subject to occupancy taxes) The revenues collected are used to promote local tourism, including, but not limited to, shoreline development and beach re-nourishment.
Occupancy taxes apply to the same transactions that are subject to state sales taxes on accommodations mandated by G.S. 105-164.4(a)(3). So, if you are responsible for occupancy taxes to the Village of Bald Head Island, you must also register with the NC Department of Revenue and submit sales taxes on the same transaction.
Keep in mind that regardless of how the taxes are remitted, it is the homeowner or their agent’s responsibility to file a tax report with the Village on a monthly basis. CLICK HERE for the monthly tax report form. It is important to note that these tax reports are confidential and not subject to a public information request.
If the property is owned or rented by a business, such as a bed and breakfast, or if a homeowner advertises and rents directly to individuals, the transaction is referred to as a retail transaction, and the retailer must collect and remit occupancy taxes to the Village.
If the property owner contracts with a facilitator, such as Airbnb, HomeAway (VRBO), or Trip Advisor, the facilitator will collect and remit occupancy taxes on the property owner’s behalf.* It is still the property owner’s responsibility to file a monthly tax report with the Village and provide proof that the facilitator has made payment.
If the property owner contracts with a rental agent, that rental agent is responsible for collecting and remitting all occupancy taxes to the Village. The assumption is that the rental agent will provide each property owner with a statement showing that the taxes have been paid.
It is the homeowner’s responsibility to make sure all taxes collected on each rental are properly remitted to the Village.
(*Note – in the case of HomeAway, (or VRBO), only those reservations and collections made after October 1, 2019, are subject to collection by HomeAway (or VRBO). For those reservations taken prior to October 1, 2019 – even for rentals commencing after October 1, 2019, HomeAway is NOT responsible, and did not, collect occupancy taxes.)
Renting your property? Quick Reminders – Due Dates
- Tax Reports are due each month on the 20th day of the month following the rental.
- Sales tax reports are due to the NC Department of Revenue on the 20th day of the month following the receipt of rental income. Click here for the sales and use tax website (https://www.ncdor.gov/taxes-forms/sales-and-use-tax).
- Renting a property is considered a business enterprise. NC requires all businesses to pay personal property taxes on all business personal property. Click here for more information on filing your personal property tax return. https://www.ncdor.gov/taxes/north-carolinas-property-tax-system/types-property-be-taxed.
- Don’t forget insurance! Some platforms automatically include extra insurance, but don’t assume they all do, and liability and property insurance provide different coverages. Review your coverage with your insurance agent to make sure there are no surprises.