Idaho’s new law, in effect since July 1, 2026, expands the tax responsibilities related to short-term rentals. Under the new rule, property owners who bypass short-term rental marketplaces and arrange rentals directly with occupants must also comply with state sales and use tax requirements. The policy change aims to bring direct and marketplace-based rentals under the same tax compliance rules.

New Rules for Short-Term Rentals

Under the previous rules, short-term rental marketplaces were responsible for registering with the Idaho State Tax Commission and for collecting, reporting, and paying applicable local lodging taxes on behalf of rental operators or guests. However, with new rules in place, owners of short-term or vacation rentals who rent their properties directly to guests, without using a short-term rental marketplace, will be treated similarly to those marketplaces for tax purposes.

More specifically, those who arrange rentals directly with occupants must register with the Idaho State Tax Commission and collect, report, and pay applicable local lodging taxes. This means anyone who rents residential property for 30 days or less directly to an occupant must collect and report Idaho sales and use tax. They may also owe auditorium district tax, travel and convention tax, or other local taxes, depending on location

For those unfamiliar with Idaho sales and use tax rules and regulations, auditorium district taxes are local sales taxes applicable only to short-term lodging, 30 days or less, within their district boundaries. Currently, there are five such districts. While sales and use tax, travel and convention tax, and auditorium district taxes are submitted to the Idaho State Tax Commission, any other local or city-specific sales taxes must be paid to the municipality where the rental property is located.

Conclusion

By introducing these rules, Idaho legislators aim to prevent tax gaps where privately arranged short-term rentals could avoid lodging tax collection obligations. As a result, Idaho is placing greater responsibility on individual rental owners to properly register, collect applicable local taxes, file reports, and remit the taxes due on short-term accommodations.