VRBO Host Taxes in Nevada - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Nevada

With Nevada’s vibrant tourism and growing short-term rental market, hosting on platforms like VRBO presents a lucrative opportunity. However, alongside the income comes the responsibility of understanding and fulfilling tax obligations. Rental income is generally taxable at both the federal and state levels, though Nevada’s tax landscape is uniquely positioned regarding state income tax.

Nevada State Tax Rules for Rental Income

Nevada distinguishes itself from most states by not having a state income tax. This means VRBO hosts are not subject to Nevada’s personal income tax on their rental earnings. However, this does not exempt hosts from federal income tax obligations. All rental income must still be reported to the IRS. A common misconception is that no state income tax means no taxes at all; this is incorrect. Furthermore, while Nevada doesn’t have a state income tax, it does collect Modified Business Tax (MBT) from businesses operating within the state. While most VRBO hosts operating as individuals won’t trigger MBT, those operating through an LLC or other business entity should consult with a tax professional to determine their MBT obligations. Nevada also has a sales tax on short-term rentals, typically collected and remitted by the VRBO platform itself, but hosts should verify this is occurring correctly. The state’s focus on tourism means regulations surrounding short-term rentals are evolving, so staying informed about local ordinances in cities like Las Vegas, Reno, and Carson City is crucial. Resources regarding business licensing and regulations can be found on the Nevada Secretary of State’s website: https://www.nvsos.gov/. Remember, even without state income tax, accurate record-keeping is essential for federal tax compliance.

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

Determining whether your VRBO activity constitutes a passive rental or an active business is the most important tax question for a host, as it directly impacts whether you owe self-employment tax.

• Schedule E (Passive Rental Income): Most casual hosts report their rental income and expenses on Schedule E (Supplemental Income and Loss). This applies if you primarily provide basic lodging and minimal services between guests, such as cleaning. Reporting on Schedule E generally exempts you from the 15.3% self-employment tax.
• Schedule C (Active Business Income): If you provide “substantial services” to guests – such as daily cleaning, providing meals, or offering concierge-style services – the IRS may consider your VRBO activity an active business. In this case, you report income and expenses on Schedule C (Profit or Loss from Business) and are subject to the 15.3% self-employment tax (Social Security and Medicare) on your net profits.

Top Tax Write-offs for Nevada Hosts

Maximizing deductions is key to minimizing your tax liability. Here are some common write-offs for Nevada VRBO hosts:

• Platform Fees: Fees charged by Airbnb, VRBO, and other platforms are fully deductible as business expenses.
• Mortgage Interest & Property Taxes: You can deduct the portion of your mortgage interest and property taxes that corresponds to the percentage of your home used for rental purposes and the number of days it was rented.
• Repairs, Maintenance & Cleaning: Expenses for repairing damage, routine maintenance (like HVAC servicing), and professional cleaning services are deductible. This also includes the cost of cleaning supplies.
• Depreciation: This is a powerful deduction that allows you to recover the cost of your rental property (and certain furnishings) over its useful life. Depreciation calculations can be complex, and it’s often advisable to consult with a tax professional.