The Chesterfield County Code requires any certified short-term rental business to collect from the lessee, at the time of rental, a tax on the gross rental receipts (excluding state and local sales taxes). The law separates short-term rental businesses into two categories depending on the type of property that is primarily rented. The tax rate is determined by the category for which the business qualifies and has been certified:
- The first category covers most short-term rental businesses, and includes businesses involved in the rental of personal property such as inflatables, signs, sporting goods, DVDs, video games, party/catering equipment, and similar items. The tax rate for this category is 1% of gross rental proceeds.
- The second category is for businesses that rent heavy equipment property, such as construction machinery and equipment, welding equipment, carpentry equipment, agricultural machinery, carpet cleaning equipment, floor sanding or waxing machines, lawnmowers, materials handling equipment, power washers, and scaffolding. The tax rate for this category is 1.5% of gross rental proceeds.
The collected tax is held in trust by the business and remitted to the commissioner of the revenue on a quarterly basis. The quarterly return must be filed on or before the 15th day of the month following the quarter end, and the tax paid on or before the last day of that month.
Short-term rental businesses must be certified, and rules for certification in either category are detailed in the application forms and their instructions. These forms are available for download below.
Further information is available from our office.
Frequently Asked Questions for Short-Term Rental:
1. What are the effects of certification as a short-term rental company?
Local taxes for rental businesses that become certified short-term rental businesses are affected in the following ways:
- Rental inventory is no longer subject to the business tangible personal property tax, and
- The business license classification for rental revenue is that of “retail merchant,” as opposed to “personal service” for non-certified rental businesses.
Certified businesses will receive a certificate which must be displayed in each qualified location.
2. What is the application deadline for certification?
The deadline to apply for renewal certifications is January 31 of the current tax year. For new businesses seeking first-time certification as a short-rental business, application is expected within 30 days (consistent with the grace period for filing the business license application itself).
3. Are there any extensions to the January 31 date for renewal applications for certification?
No. Applications for renewal of certification MUST be postmarked by January 31 of the tax year for which certification is sought.
4. What if a previously-certified short-term rental business misses the deadline for renewal or otherwise does NOT qualify for certification in a subsequent year?
The effects of certification listed in Question # 1 above are reversed. Namely, the rental inventory reverts to business tangible personal property taxable status, and the business license classification reverts to that of “personal service.”
Certification (or lack thereof) is an annual process, meaning that businesses that are certified one year may NOT be certified the next, and vice-versa.