VRBO Host Taxes in Louisiana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Louisiana

From the historic French Quarter of New Orleans to the serene bayous, Louisiana’s vibrant tourism scene offers unique opportunities for VRBO hosts. However, alongside the hospitality comes the responsibility of accurately reporting rental income, which is subject to taxation at both the federal and Louisiana state levels. This guide provides an overview of the key tax considerations for VRBO hosts in Louisiana for the 2025 tax year.

Louisiana State Tax Rules for Rental Income

As a resident of Louisiana, filing a state income tax return is required regardless of income level. Louisiana operates under a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Louisiana utilizes Form IT-540B, Individual Income Tax Return for Self-Employed Individuals, to report income derived from rental activities. Rental income is generally reported as part of your overall adjusted gross income. Crucially, the classification of your VRBO activity – whether as a passive rental or an active business – significantly impacts how this income is taxed at the state level. If reported on Schedule E at the federal level, the income flows through to Form IT-540B. If reported on Schedule C, the net profit is also reported on Form IT-540B, and is subject to self-employment tax calculations. Louisiana also allows for deductions similar to those at the federal level, such as mortgage interest and property taxes, which can reduce your taxable income. Keep meticulous records of all income and expenses to accurately calculate your state tax liability. Louisiana’s Department of Revenue provides detailed information and resources for taxpayers; you can find more information at Louisiana Department of Revenue.

The Critical Tax Question: Are You a Business or a Rental?

This is the most important tax question for a VRBO host, as it determines if you owe self-employment tax. The IRS classifies rental activities based on the level of services provided.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Passive Income) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. Think of it as simply providing a space for someone to stay.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, providing toiletries beyond basic soap, concierge services), you report on Schedule C and must pay the 15.3% self-employment tax. This is because the IRS considers this an active business, not just a rental.

Top Tax Write-offs for Louisiana Hosts

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible. These are considered expenses incurred to generate rental income.
• Mortgage Interest & Property Taxes: Deduct the portion of mortgage interest and property taxes corresponding to the rental space and the period it was rented. If the property is used for both personal and rental purposes, you must allocate these expenses accordingly.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items (leaky faucets, broken appliances), professional cleaning, and cleaning supplies. Routine maintenance is deductible; major improvements that increase the property's value are generally depreciated.
• Depreciation: A powerful but complex deduction for wear and tear on your property. This allows you to deduct a portion of the property's cost over its useful life. Often requires a tax professional to calculate correctly.