Operators of short-term lodging in Washington collect several taxes from guests and owe one of their own. The Washington state lodging tax package starts with the 6.5% state retail sales tax on the room charge, adds local sales tax, layers on hotel/motel and (in King County) convention center taxes, and in some areas tacks on a flat per-night Tourism Promotion Area charge. Separately, the operator pays Business and Occupation tax on gross lodging income. Which rates apply depends entirely on the property’s location.
The Taxes a Guest Pays on a Room
Every lodging transaction begins with the statewide 6.5% retail sales tax, which applies to room charges the same way it applies to other retail sales.1Washington State Legislature. Washington Code 82.08.020 – Tax Imposed Local sales tax stacks on top of that.
Then the lodging-specific layers begin. Under RCW 67.28.180, cities and counties impose a basic hotel/motel tax at 2%, and every jurisdiction that levies it has taken the full 2%. This one does not add to the guest’s bill: it is credited against the state’s 6.5% sales tax under RCW 67.28.1801, redirecting revenue from the state to the local government rather than charging the guest extra.2Washington State Legislature. Washington Code 67.28.1801
An additional lodging tax under RCW 67.28.181 can add up to another 2% that the guest actually pays. This one applies only to properties with 40 or more rooms.3Washington State Legislature. Washington Code 67.28.181
King County Convention and Trade Center Tax
Lodging in King County carries an additional convention and trade center tax that funds the Seattle convention facility.4Washington Department of Revenue. Convention and Trade Center Tax The rate depends on where in the county the property sits:
- Inside Seattle: 7% state convention center tax, plus a 1% local convention center tax (reduced from 2% effective January 1, 2021).
- Elsewhere in King County: 2.8% state convention center tax.
These rates apply to short-term rentals as well as traditional hotels. For a Seattle property, the convention center portion alone adds 8% before any other tax layers are counted, which is why Seattle receipts look so different from those in the rest of the state.
Business and Occupation Tax on Your Lodging Income
The tax new operators most often miss is not one collected from guests. Every lodging business in Washington owes Business and Occupation tax on its own gross receipts. Lodging income falls under the retailing B&O classification at 0.471%.5Washington Department of Revenue. Business and Occupation (B&O) Tax It is calculated on gross income with no deduction for the costs of running the property, and it is the operator’s obligation, not the guest’s.
Income from nontransient rentals (stays of 30 days or more) is exempt from B&O tax.6Washington Department of Revenue. Lodging – Nontransient (Long-Term) Small operators may also qualify for a small business B&O credit that reduces or eliminates liability. Ignoring B&O tax altogether is a common source of back-tax exposure at audit.
Which Stays Count as Taxable Lodging
Lodging taxes apply to transient stays, defined by Washington as occupancy for less than one month, or less than 30 consecutive days when the rental period does not begin on the first of the month.7Washington Department of Revenue. Lodging – Transient (Short-Term) Hotels, motels, bed and breakfasts, RV parks, private campgrounds, and personal home rentals all fall inside that definition.
A guest becomes nontransient on the 30th consecutive day, even if they switch rooms or units during the stay. If a guest contracts in advance for 30 or more consecutive days and actually completes the initial 30, the operator does not need to collect lodging taxes from day one.6Washington Department of Revenue. Lodging – Nontransient (Long-Term) The trap: if that guest books 30 days but checks out on day 22, the stay was transient the entire time and all taxes apply retroactively. Track occupancy dates carefully.
Airbnb, VRBO, and Platform Tax Collection
Washington’s marketplace facilitator law explicitly excludes businesses that book lodging in a hotel or similar facility for stays under 30 days, so short-term rental platforms are not legally classified as marketplace facilitators for lodging transactions.8Washington Department of Revenue. Marketplace Facilitators
Airbnb, however, has collected and remitted state and local retail sales tax, special hotel/motel taxes, and convention and trade center taxes on behalf of Washington hosts since October 2015 under a voluntary agreement with the Department of Revenue.9Washington Department of Revenue. Airbnb to Collect and Send Taxes on Behalf of Hosts Hosts using Airbnb still register with the Department of Revenue, report all rental income on their excise tax return, and take a deduction for sales taxes the platform has already remitted. The host remains personally responsible for retailing B&O tax on that income.
Other platforms may not have the same arrangement. If your platform is not remitting Washington taxes, the entire obligation falls on you. Confirm each platform’s collection status with the Department of Revenue rather than assuming it matches Airbnb’s.
Tourism Promotion Area Charges
Some parts of Washington sit inside a Tourism Promotion Area, a special district authorized under RCW 35.101 that imposes a flat per-night charge rather than a percentage.10Washington State Legislature. Washington Code 35.101 – Tourism Promotion Areas The base charge can run up to $2 per occupied room per night. Jurisdictions where operators representing at least 60% of the charges consent can add another $3 per room per night; that additional charge expires July 1, 2027.
Properties with fewer than 40 rooms are exempt from TPA charges, as are qualifying temporary medical housing facilities. Local legislative bodies can exempt other lodging businesses as well. TPA charges appear as a separate line on the guest receipt, since they are not a percentage tax.
Finding the Right Rate for Your Property
Washington assigns a four-digit location code to every taxing jurisdiction, and that code fixes the combination of state, local, and special-district rates that apply.11Washington Department of Revenue. WA Sales Tax Rate Lookup URL Interface The Department of Revenue’s Tax Rate Lookup Tool takes a physical address and returns the correct rates.12Washington Department of Revenue. Sales and Use Tax Rates
Use the tool, not the mailing address. A property one block inside city limits can owe a different lodging tax rate than one just outside, and recently annexed areas often carry the wrong code if you rely on the post office version. Run the lookup when you open a new property and again after any annexation or boundary change.
Keep gross lodging income tracked separately from other taxable sales like food, merchandise, or event fees, because the tax categories differ. If your property is inside a Tourism Promotion Area, log the flat per-night charges separately as well.
Filing Frequency and Due Dates
Excise tax returns are filed through the My DOR online portal.13Washington Department of Revenue. Tax Returns The Department of Revenue assigns a filing frequency based on your estimated annual liability:14Washington Department of Revenue. Filing Frequencies and Due Dates
- Monthly for annual liability above $4,800, due the 25th of the following month.
- Quarterly for annual liability between $1,051 and $4,800, due the last day of the month following the quarter.
- Annual for annual liability of $1,050 or less, due April 15.
Most active lodging businesses file monthly. If a due date falls on a weekend or legal holiday, it moves to the next business day. Payments are made electronically through the portal.
Late Filing Penalties
The penalty structure escalates quickly. Tax not paid by the return’s due date incurs a 9% penalty. If it remains unpaid at the end of the following month, the penalty rises to 19%. Unpaid past the end of the second month after the due date, the penalty is 29%. The penalty is calculated on tax owed, not gross revenue, but during a busy season it compounds fast.
Records to Keep
Washington law requires businesses to maintain complete records for at least five years.15Washington Department of Revenue. Record Keeping Requirements For a lodging operator that means guest folios documenting stay lengths, exemption paperwork for nontransient guests, TPA charge records, and every My DOR confirmation receipt. If the Department of Revenue audits and you cannot produce those five years, most of your ability to dispute the assessment is gone.