The following is a commentary written by Christine Karpinski, while they are the views of Christine Karpinski, they may not necessarily be the views of HomeAway, Inc. or its subsidiaries.

As a long time vacation rental property owner and the author on the topic (how to rent by owner), sales taxes have always been a pretty hot discussion topic among owners of vacation rental homes. I will say that I have seen many positive effects of tourism and bed taxes.

Many vacation rental owners fear that charging sales tax ultimately hurts the owners' bottom line, I disagree. It's all about presentation and attitude when telling your renters about the sales tax. In today's world, we are accustomed to paying sales tax on every purchase we make. Why should renting a condo or cabin be any different?

Below is an excerpt from my book, How to Rent Vacation Properties by Owner. I am hoping that you will see the positive side of collecting sales taxes on your vacation rental properties:

For starters, understand that the money does not come from you - it comes from the renters. You are just a 'middleman' for the government. Actually, you should look at it as a duty that ultimately works in your favor.

These taxes pay for many things that are directly beneficial to your investment such as roads, sidewalks, beach & land preservation and the local chamber of commerce (which is responsible for national tourism advertising campaigns; you know, those colorful, glitzy TV ads that show what a beautiful place your state is). That is why I view these taxes as a good thing.

When I give seminars in Florida, the county departments of revenue always attend. I give them a chance to speak with the owners and explain how to file the taxes. They also go into great detail about what the current local taxes are allocated for. The counties like the tourists as much as we owners do.

For the counties, sales tax brings in revenue, jobs and growth. For us, the owners, these taxes go toward things that directly impact our property values. The tax revenues give the counties the funding to make major capital improvements in the area.

For example, Walton County, Florida built a 5 or 6-mile boardwalk right in front of my condo complex. This has made the area safe for walking and jogging, and biking. Moreover, they purchased a trolley to transport renters from off beach properties to the beach. This cuts down on traffic and congestion right in front of my property. And they purchased dune buggies for the police department to patrol the beaches, which makes it a safe place for vacationers.

All of these things directly impact the tourism in the area and subsequently improve my property values.

So if you view the sales tax as a benefit for yourself, maybe that will make it easier to collect and pay. Remember, somebody has to pay for all of those things the municipality provides to make a more pleasant environment for the tourists. It may as well be the renter (be glad this is a cost you are simply passing on, and not something taken directly out of your own pocket!).

If I have not yet convinced you that sales taxes are good for you, let me remind you—it's the law! There are stiff fines, penalties, and interest penalties if you do not comply. Many states are beginning to come down hard on vacation property owners who are tax avoiders (I don't like to say “tax evaders,” sounds too much like you can end up in prison). Please don't be naive and ask, "How are they going to find out?" The tax departments aren't stupid. They know about the Internet. They have people on their staff that regularly and systematically search through the listings. So, if you have a listing on the Web, the tax department will find you, eventually. I don't think I'm being overly dramatic when I say, 'Big Brother is watching.'

If you don't want to deal with the hassles of filing monthly or quarterly sales taxes for your second home, HotSpot has a low cost service that will handle this for you.

© Christine Karpinski 2006

VRBO Listing Critique: Sea Sun Rentals (Fairfield Sunrise, AZ)    With some help from this owner's personal website, this VRBO listing could be especially great.

Buying an Investment Property in Montana (Transcript)    Christine talks with realtor, Dorothea Lowe about the Montana vacation home market.

Buying an Investment Property in Provincetown, Massachusetts (Transcript)    Christine talks with realtor Rick Tourgee about the vacation rental market in Provincetown.

Insurance for Vacation Rental Homes-- Simplified (Transcript)    Christine speaks with insurance expert D. Workman about getting homeowner's and liability insurance for vacation rental homes.

New 3% Lodging Tax in Sevier County Tennessee (Transcript)    Christine talks with Sevier County Trustee, Jettie Clabo about the new 3% occupancy/lodging tax effective July 1st.

Sales Tax and Vacation Rentals 101 (Transcript)    Christine speaks with CPA and co-owner of HotSpotTax.com K. Stephens about collecting and paying sales taxes for vacation homes.

Buying an Investment Property in Martha's Vineyard (Transcript)    Christine chats with Martha's Vineyard buyer's agent, Fred Roven about the vacation home market in the area.

Florida Sales Tax Regulations: Part 1 (Transcript)    Christine Karpinski speaks with Belinda Watson of the Florida Department of Revenue about collecting sales taxes for vacation rental properties.

Buying an Investment Property in Gatlinburg / Pigeon Forge, TN (Transcript)    A transcript of Christine's interview with Gatlinburg and Pigeon Forge Realtor, Pat Malone.

Buying an Investment Property in Park City, Utah (Transcript)    Christine interviews Park City realtor, Dennis Hanlon about the Park City vacation home market.

Buying an Investment Property on the California Gold Coast (Transcript)    Christine talks with real estate agent, Meredith McKenzie, about the vacation rental market along the California Gold Coast.

Florida Sales Tax Regulations: Part 2 (Transcript)    Second half of Christine's interview with Belinda Watson of the Florida Department of Revenue.

Vacation Rental Bans (Transcript)    Christine addresses the issue of vacation, short-term, and transient rental bans.

Introduction to Vacation Rentals (Transcript)    Christine talks about the basics of buying a vacation rental home.

One-on-One with Canmore, AB Vacation Rental Owner Richard Colwell Part 1 (Transcript)    Christine discusses the challenges of owning and renting a vacation home in Canada while living in the UK.

Ask Christine #10: Should You Break Up the Rental Rate? (Transcript)    Christine answers a question from an owner who wants to know if it's better to charge one all-inclusive rate or to break the rental rate into parts (cleaning fee, sales tax, etc.).

Buying an Investment Property in Stowe, VT (Transcript)    Christine chats with Stowe real estate agent, Ken Libby about the current market conditions.

Vacation Rental Resources: Ontario (ON)

Vacation Rental Resources: Quebec (QC)    Handy resources for vacation rental owners in Quebec, including tax information, regulations and forms.

Vacation Rental Resources: New Brunswick (NB)    Handy resources for vacation rental property owners in New Brunswick, including tax information and links for local newspapers.

Vacation Rental Resources: British Columbia (BC)    Handy resources for cottage rental owners in British Columbia, including tax information, regulations and forms.

Vacation Rental Resources: Florida (FL)    Handy resources for Florida vacation rental owners including tax information, regulations, and forms.

Vacation Rental Resources: Nova Scotia (NS)    Quick list of resources for Nova Scotia vacation rental owners.

Guide to Starting a Vacation Rental in... Fenwick Island, Delaware    Vacation rental owner resources for Fenwick Island.

Complying with State, County, and City Short-Term Rental Laws    A list of considerations a new vacation rental owner should look into.

Vacation Rental Resources: Alberta (AB)    Handy vacation rental resources for owners in Alberta, Canada.

Vacation Rental Resources: Newfoundland (NL)    Handy resources for vacation rental property owners in Newfoundland, including tax information and links for local newspapers.

Raising Your Rates: When and How Much?    When and how much should you raise the rates of your vacation rental property for next year?

Determining Monthly Rates for Your Vacation Rental Home    A general formula you can use to determine monthly rental rates.

Income Tax Deductions for Vacation Rental Owners    Don't miss out on the federal income tax deductions available to vacation rental home owners.

How to Work with a Travel Agent to Book Your Vacation Home    Travel agents can be a source of bookings and often work for clients who may not have discovered your property otherwise.

State Sales Tax Offices    Links to each state's sales tax office.

The Top Ten Things You Should Have In Your Vacation Rental Rules    A good rental policy can go a long way toward protecting you and your renters from common vacation rental “disasters."

Sales Tax Requirements for Vacation Rental Homes    Do you know the rules for your state, county and/or city sales and lodging taxes?

Sales Tax Formulas for Vacation Rentals    How to calculate your base rate or sales tax amount.

SF Seminar Response Page

The Different Types of Vacation Rental Travelers    A light-hearted look at the easy-to-book travelers, the tough-sells, and the ones to avoid altogether.

Checklist for Responding to Vacation Rental Inquiries    Be sure your email includes all the necessary information before clicking send.

10 Ways to Ease in Travelers New to Renting Vacation Homes    For some, renting a vacation home sight-unseen can be a leap of faith. Here are some ways to ease their minds.

Christine's Blog: Proposed Vacation Rental Bans in Hawaii (3/2/07)    Christine addresses the reasons behind the Owner Community's new Vacation Rental Bans and Local Rental Alerts sections.

The 2nd Edition of Christine Karpinski's Book, How to Rent Vacation Properties by Owner    Christine talks about the new 2nd edition of How to Rent Vacation Properties by Owner, which includes over 150 pages of new material and is now available on her website.

Christine's Blog: How I'd Like to Respond to Bargain Hunters (5/7/07)    Christine reacts to a few of the inquiries that she received this week.

Christine's Blog: Not-So-Smooth Sailing (8/6/07)    After her claim of a smoothly-running summer last week, Christine recants as this last week was a doozy.

Vacation Rental Seminars & Workshops    Information about Christine's upcoming How to Rent Vacation Properties by Owner seminars and workshops for vacation rental owners.

How to Get Help Collecting and Filing Sales Tax    HomeAway offers an easy way for you to remit your sales and lodging taxes to the appropriate agencies.

May 23, 2007: Florida Property Tax Relief and Reform    Letter from CAPEC Executive Committee regarding Florida property taxes.

May 15, 2007: Recent Sales and Lodging Tax Rate Changes    Some examples of tax rate changes that have occurred in 2007.

10 Ways to Defend Against Vacation Rental Bans in Your Area    Tips for staying one step ahead of short-term rental bans.

Vacation, Transient, and Short-Term Rental Restrictions    Christine addresses the issues driving vacation rental bans and how to fight them.