The meteoric rise of Airbnb has transformed hordes of consumers into part-time property managers or landlords.

Many of these people don’t know how to comply with the tax and licensing requirements for rentals. And trying to get a handle on such regulations, which local and state governments all around the country are investigating, can be challenging.

“Most owners want to be compliant with taxes, but may not understand how their property is taxed, and may often think they must only file federal income taxes on their rentals,” said Rob Stephens, CEO of HotSpot Tax, in a statement. “It can be incredibly confusing for owners to figure out what the taxes and regulations are in their particular location.”

HomeAway, a short-term rental website that focuses on vacation rentals, has unveiled a new tool in partnership with HotSpot Tax to help clear up some of the confusion.

HomeAway bills its new “HotSpot Tax Center” as “the only automated Web-based tax filing solution for state and local short-term rental taxes.”

The tool is powered by HotSpot Tax, and appears to be have grown out of HomeAway’s financial investment in HotSpot Tax.

It’s possible that white-label versions of the tool might soon pop up on other short-rental sites. In announcing its investment in HotSpot Tax in August 2014, HomeAway said HotSpot could leverage HomeAway’s backing “to expand upon its existing stand-alone tax compliance product to offer an integrated solution across many short-term rental platforms.”

HotSpot Tax was acquired in February by Avalara, a provider of compliance software. (HotSpot Tax will soon be renamed Avalara MyLodgeTax.)

HomeAway users who access the new tool can learn about tax-related topics including income taxes, lodging taxes, licensing and zoning requirements.

They also can enter their address to see taxes owed (tax rate) from every rental transaction, number of tax returns to file annually, minimum number of nights a property must book to be deemed taxable, and information about the number of registrations or licenses required.

The new tool complements the tax collection features of HomeAway’s online booking platform, which lets rental owners enter the appropriate tax rate to be tacked on to each rental transaction and to access previous invoices.

“This is a critical time in the growth of the industry and the services of HotSpot align perfectly with HomeAway’s requirement for all vacation rental owners to be aware of and comply with their legal responsibilities,” said Carl Shepherd, chief strategy and development officer at HomeAway, in a statement.

Email Teke Wiggin.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription