VRBO Host Taxes in Oregon - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Oregon

Oregon’s stunning coastline and diverse landscapes make it a popular destination for travelers, creating lucrative opportunities for VRBO hosts. However, alongside the income comes the responsibility of understanding and fulfilling tax obligations. Rental income generated through platforms like VRBO is generally taxable at both the federal and Oregon state levels. Careful record-keeping and understanding applicable deductions are crucial for maximizing profitability and ensuring compliance.

Oregon State Tax Rules for Rental Income

As a resident of Oregon, filing a state income tax return is required regardless of income level. Oregon utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Oregon residents reporting rental income as self-employment income will primarily use Form OR-40, the Oregon Individual Income Tax Return, along with Schedule OR-I, which is used to report income from sources other than wages. Rental income is considered “other income” and must be reported accordingly. Oregon also requires taxpayers to calculate and pay estimated taxes quarterly if they expect to owe more than $1,000 in state income tax. This is particularly relevant for VRBO hosts with consistent rental income. The Oregon Department of Revenue provides detailed information on estimated tax payments and deadlines. Furthermore, Oregon allows for certain business expense deductions that can reduce your taxable income. These deductions must be ordinary and necessary expenses related to the rental activity. It’s important to note that Oregon’s tax laws can be complex, and consulting with a qualified tax professional is recommended to ensure accurate reporting and maximize available deductions. Keep detailed records of all income and expenses related to your VRBO activity, as the Oregon Department of Revenue may request documentation to support your claims. You can find more information and resources on the Oregon Department of Revenue website: Oregon 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 (Supplemental Income and Loss) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. Simply making the property available for rent and handling basic upkeep generally falls under this category.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, providing toiletries, concierge services, or similar hotel-like amenities), you report on Schedule C (Profit or Loss from Business) and must pay the 15.3% self-employment tax (Social Security and Medicare). The more actively involved you are in managing the guest experience beyond simply providing lodging, the more likely you are to be considered an active business.

Top Tax Write-offs for Oregon Hosts

• Platform Fees: Fees from Airbnb, VRBO, and other rental platforms are fully deductible as business expenses.
• Mortgage Interest & Property Taxes: Deduct the portion of your mortgage interest and property taxes that corresponds 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 (repairs), professional cleaning services, and cleaning supplies. Routine maintenance to keep the property in good condition is also deductible.
• Depreciation: A powerful but complex deduction for the wear and tear on your rental property and furnishings. It allows you to deduct a portion of the property's cost over its useful life. Often requires a tax professional to calculate correctly.