Airbnb Host Taxes in Washington - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Washington

The Evergreen State’s stunning scenery and vibrant cities make Washington a popular destination for travelers, creating lucrative opportunities for Airbnb hosts. However, alongside the income comes the responsibility of understanding and fulfilling tax obligations at both the federal and Washington state levels. This guide provides an overview of the key tax considerations for Airbnb hosts in Washington for the 2025 tax year.

How Washington Handles Gig Worker Taxes

Washington is unique in that it does not impose a traditional personal income tax. However, Airbnb hosting income is subject to the Washington Business & Occupation (B&O) tax, a gross receipts tax. Generally, most Airbnb hosts operating on a smaller scale will not exceed the B&O tax threshold, which varies depending on the business activity. The threshold for service businesses (which Airbnb hosting often falls under) is relatively low. It’s crucial to understand that B&O tax is calculated on gross income – meaning before any expenses are deducted. Even if no B&O tax is ultimately due, registration with the Washington State Department of Revenue may be required if gross income exceeds certain limits. Failure to register when required can result in penalties. Additionally, Washington State collects retail sales tax on short-term rentals, which Airbnb generally remits on your behalf. Hosts should verify Airbnb’s compliance with sales tax collection and reporting. Staying informed about these regulations is vital for compliant operation. Resources and registration information can be found at the Washington State Department of Revenue.

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

Determining whether your Airbnb activity constitutes a passive rental or an active business is the most important tax decision you’ll make, as it directly impacts whether you’ll owe self-employment tax. This classification dictates which tax forms you’ll use and how your income is taxed.

• Schedule E (Passive Rental Income): Most casual Airbnb hosts report their income and expenses on Schedule E (Supplemental Income and Loss). This applies if you primarily offer lodging and minimal services – essentially, providing a place to stay and basic cleaning between guests. Reporting on Schedule E means you are not subject to the 15.3% self-employment tax.
• Schedule C (Active Business Income): If you provide “substantial services” to your guests – such as daily cleaning, providing meals, concierge services, or offering amenities comparable to a hotel – the IRS may consider your Airbnb activity an active business. In this case, you’ll report income and expenses on Schedule C (Profit or Loss from Business) and will be responsible for paying the 15.3% self-employment tax on your net earnings.

Top Tax Write-offs for Washington Hosts

Maximizing your deductions is key to minimizing your tax liability. Here are some common tax write-offs available to Washington Airbnb hosts:

• Platform Fees: All fees paid to Airbnb, VRBO, or other hosting 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. For example, if 20% of your home is used as a rental and it was rented for 60 days out of the year, you can deduct 20% of 60/365 of your mortgage interest and property taxes.
• Repairs, Maintenance & Cleaning: Costs associated with maintaining and repairing your rental property, including professional cleaning services and cleaning supplies, are deductible. Distinguish between repairs (keeping the property in good working order) and improvements (adding value to the property), as improvements are depreciated over time.
• Depreciation: Depreciation allows you to deduct a portion of the cost of your rental property over its useful life. This is a complex deduction, and consulting with a qualified tax professional is highly recommended to ensure accurate calculation and compliance.