Airbnb Host Taxes in Vermont - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Vermont

Vermont’s stunning landscapes and vibrant tourism draw visitors year-round, making short-term rentals a popular income source. However, revenue generated through platforms like Airbnb is subject to both federal and Vermont state income taxes. Understanding these obligations is crucial for compliant and optimized tax filing for the 2025 tax year.

Vermont State Tax Rules for Rental Income

As a resident of Vermont, any income earned from Airbnb hosting is subject to Vermont income tax. Vermont utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year (filed in 2026), Vermont residents are required to file an income tax return if their adjusted gross income exceeds their standard deduction. The primary form for self-employed individuals, including Airbnb hosts reporting income on Schedule C, is Form INC-100, Vermont Income Tax Return. Even if you report on Schedule E at the federal level, you must still file a Vermont income tax return to report the income. Vermont also requires the filing of Schedule IN-100, Income from Sources Within Vermont, to determine the portion of your income sourced to Vermont.

Vermont does not currently have a specific tax or registration requirement solely for short-term rentals beyond the standard income tax obligations. However, local municipalities may have their own regulations and taxes, such as local option taxes or registration requirements. It is vital to check with your town or city clerk to ensure full compliance with all applicable local laws. Furthermore, Vermont’s Department of Taxes actively monitors online rental platforms and may issue information requests to ensure accurate reporting. Accurate record-keeping is paramount to avoid potential penalties.

For more information and access to Vermont tax forms, please visit the Vermont Department of Taxes website: https://tax.vermont.gov/

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

This is the most important tax question for an Airbnb host, as it determines if you owe self-employment tax. The IRS classifies rental activity 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. Providing basic amenities like towels and linens, or occasional light maintenance, generally falls under this category.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, concierge services, providing toiletries beyond basic soap), you report on Schedule C and must pay the 15.3% self-employment tax. This is treated as an active business, not a passive rental.

Top Tax Write-offs for Vermont Hosts

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible. These are typically reported as expenses on Schedule E or Schedule C.
• Mortgage Interest & Property Taxes: Deduct the portion corresponding to the rental space and period. 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, professional cleaning, and supplies. Routine maintenance is deductible; improvements that increase the property's value are depreciated.
• Depreciation: A powerful but complex deduction for wear and tear on your property. Often requires a tax professional to calculate correctly. This allows you to deduct a portion of the property's cost over its useful life.