VRBO Host Taxes in Wyoming - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Wyoming

Wyoming’s stunning landscapes and outdoor recreation draw visitors year-round, making vacation rentals a popular source of income. However, revenue generated through platforms like VRBO is subject to taxation at both the federal and state levels, even in the Cowboy State. Understanding these obligations is crucial for compliant and optimized tax filing for the 2025 tax year.

Wyoming State Tax Rules for Rental Income

Wyoming is unique among states in that it does not impose a state income tax on individuals. This means there is no Wyoming state income tax return to file regarding your VRBO income. However, this does not exempt you from federal income tax obligations. All rental income must still be reported to the IRS. A common question from Wyoming hosts, particularly those in resort towns like Jackson Hole or Cody, revolves around sales tax. While Wyoming doesn’t have a general sales tax, lodging taxes are collected at the local level – counties and municipalities – and are typically remitted by the VRBO platform directly. Hosts should verify with their local county treasurer or municipality to confirm their specific lodging tax requirements and ensure accurate reporting. Furthermore, Wyoming’s business-friendly environment means that even if your VRBO activity is considered a business (see section 2), the state offers streamlined business registration processes. It’s important to note that even without state income tax, accurate record-keeping is vital for federal reporting and potential audits. The Wyoming Department of Revenue provides resources for understanding local lodging taxes and business registration: Wyoming Department of Revenue.

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

Determining whether your VRBO activity is considered a passive rental or an active business is the most important tax decision you’ll make. This distinction dictates whether you’ll be subject to self-employment tax, a significant 15.3% tax on your profits.

• Schedule E (Passive Rental Income): Most casual VRBO hosts report their income and expenses on Schedule E (Supplemental Income and Loss). This applies if you primarily provide lodging and minimal services, such as basic cleaning between guests. If you are considered a passive rental, you avoid self-employment tax.
• Schedule C (Active Business Income): If you provide “substantial services” to your guests – think daily cleaning, providing meals, concierge services, or extensive amenities – the IRS may classify your VRBO activity as a 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.

Top Tax Write-offs for Wyoming Hosts

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

• Platform Fees: All fees charged by VRBO, Airbnb, or 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. For example, if your rental space occupies 20% of your home, you can deduct 20% of these expenses.
• Repairs, Maintenance & Cleaning: Costs associated with maintaining and repairing your rental property, including professional cleaning services and cleaning supplies, are deductible. Remember, repairs are different than improvements – repairs maintain the property, while improvements add value.
• Depreciation: This is a powerful deduction that allows you to write off the cost of your rental property (or portions of it) over its useful life. Depreciation calculations can be complex, and it’s often advisable to consult with a tax professional.