US: A bill has been signed in Washington which will require short-term rentals to remit all taxes, maintain liability insurance and include critical consumer safety provisions.
Last week, governor Jay Inslee signed the Substitute House Bill 1798, which was a top priority for the Washington Hospitality Association to get signed during the 2019 Legislative Session.
The bill’s prime sponsor, Cindy Ryu, said: “I introduced this bill to even the playing field for our local hotels. Like more and more people, I am a consumer of both vacation rentals and hotels, so I am used to paying all the same taxes when I’m in other states.
“It is only fair to pay the same type of taxes whether we stay at a hotel or a short-term rental,” she added.
The law obligates short-term rental operators and platforms to register with the state Department of Revenue and remit all local, state and federal taxes. Short-term rentals will also pay local lodging taxes which go towards promoting tourism-related activities in local communities across Washington.
Washington Hospitality Association vice-chair Ron Oh said: “I am thankful that the Washington State Legislature and state representative Cindy Ryu are taking steps to ensure the safety of people and tourists staying in Washington while also tackling the impact of short-term rentals on affordable housing in our state.”
As a result of the implementation of the legislation, rental operators will now be subject to further consumer safety obligations. These requirements include providing consumers with contact information for someone to respond to guest inquiries during stays, as well as complying with carbon monoxide alarm laws.
Short-term rental operators will furthermore need to post the unit’s address, emergency services contact information, a floor plan with fire exits and escape routes, maximum occupancy limits and the operator’s contact information in a prominent place for when guests arrive.
The Substitute House Bill 1798 brought stakeholders together to discuss short-term rental requirements in the state.
Sponsor of the bill and republican Gina Mosbrucker said: “There were many interests involved with this bill. In the end, they got together to reach a compromise agreement and I appreciate the collaborative effort of all involved.”
The final bill contains a provision requiring short-term rental operators to maintain primary liability insurance of at least $1 million to cover the rental unit. Operators will also have to fulfil the requirement if they carry out the transaction through a rental platform that provides insurance coverage.
Ryu said: “As a former insurance agent, I’m glad short-term rental owners in Washington state will be informed of the need for them to look into their liability insurance coverages before they incur any potential business liabilities.”
The bill will come into effect from 27 July, 90 days after the adjournment of the 2019 Legislative Session.