Tax Collected on Short-Term Rentals
Per the Code of Virginia § 58.1-3510.4, Chesterfield County's short-term rental tax is a tax collected by a business/person certified to engage in the short-term rental of property. Chesterfield County 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 sale taxes) for periods of 92 consecutive days or less. The term short-term rental property does not include trailers or other tangible personal property.
To be certified as a short-term rental business, the taxpayer must submit an application for each new business location in Chesterfield to the Commissioner of the Revenue within 30 days of the date the business began. The taxpayer must submit a return for re-certification for each business location each year by Jan. 31. The initial application and re-certification are available in the Citizen Portal. Additionally, the Commissioner's Office will mail a short-term rental application and tax returns annually.
Certified businesses will receive a certificate which must be displayed in each qualified location. Rental businesses that are certified short-term rental businesses have a business license classification for rental revenue of "retail merchant" (as opposed to "personal service" for non-certified rental businesses). Given this classification, short-term rental businesses' rental inventory is no longer subject to the business tangible personal property tax.
Tax Rates and Deadlines
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 qualified for and has been certified. The two categories are as follows:
- Regular Equipment Short-Term Rental covers most short-term rental businesses and includes businesses involved in the rental of personal property, such as inflatables, signs, sporting goods, DVD’s, video games, party/catering equipment and similar items. The tax rate for this category is 1% of gross rental proceeds.
- Heavy Equipment Short-Term Rental 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 with the quarterly return being filed on or before the 15th day of the month following the quarters end. Payments are due on or before the last day of the month following the end of the quarter:
|Report Deadline||Payment Deadline||Short-Term Collection Period|
|Report due April 15||Payment by April 30||January - March|
|Report due July 15||Payment by July 31||April - June|
|Report due Oct. 15||Payment by Oct. 31||July - September|
|Report due Jan. 15||Payment by Jan. 31||October - December|
A late filing penalty of 10% or $10, whichever is greater, will be assessed if the return and remittance are not postmarked by the quarterly deadline. Interest at the rate of 10% per year, calculated monthly beginning on the first day following the date upon which the tax was due, will be added to the tax and penalty.