State of Indiana Short-Term Rental Regulations

From scenic lakes to exciting cities like Indianapolis, Indiana offers many appealing travel destinations. As interest in short-term rentals grows, hosts need to understand regulations before listing properties.

In this guide, I'll outline key laws, permit rules, tax obligations, and safety standards for Indiana vacation rentals. My goal is to help hosts achieve legal compliance and avoid penalties. Let's get started!

Defining Short Term Rentals in Indiana

Indiana statutes don't provide an explicit definition of short-term or vacation rentals. However, they allow cities and counties to regulate these rentals based on length of stay.

For example, Bloomington defines short-term rentals as lodging offered for periods less than 30 consecutive days. Other jurisdictions use nightly stays as criteria.

So, while a statewide standard doesn't exist, local ordinances establish definitions within their short-term rental laws. Check requirements for your specific area.

Common Length of Stay Thresholds

Many Indiana cities define short-term rentals as those offered for periods less than 30 days. This typically covers:

• Entire homes
• Apartments
• Condos
• Cabins
• Private rooms

Listings presented as nightly or weekly vacation rentals would also qualify under most local laws.

Local Ordinances Vary

With no comprehensive statewide legislation, regulations for short-term rentals depend on local city and county ordinances in Indiana. 

These range from zoning rules to permits, taxes, health standards, and more. Researching both state statutes and local laws is key.

Starting a Short-Term Rental Business in Indiana

Here are key steps Indiana hosts should know when launching a new short-term rental property:

Check Local Zoning

Many Indiana cities restrict short-term rentals through zoning regulations. Some limit them to commercial areas only. Others prohibit them fully. Verify zoning allows rentals in your area.

Obtain Permits

Most municipalities require hosts to obtain local permits or licenses to operate short-term rentals. For example, Bloomington charges $100 annually. Indianapolis requires a $25 permit.

Register for Taxes

You'll need to register with the Indiana Department of Revenue to collect and remit applicable state and local taxes on rentals. Handle registration and filing online.

Tax Obligations for Indiana Short-Term Rentals</H2>

You must collect and pay all relevant state, county, and city taxes as a host. Here's an overview: 

State Sales Tax

Indiana levies a 7% sales tax on short-term rental transactions. This applies to total rental rates plus any cleaning or service fees paid by guests.

Hosts collect this tax at booking. You must report and pay the state monthly.

County Innkeeper's Tax

Many Indiana counties impose an innkeeper's tax on short-term rental revenue. Rates range from 5-10%, depending on the county. 

Verify if your county charges this occupancy tax and the specific rate.

Food and Beverage Tax

Some cities levy food and beverage taxes on short-term rentals offering certain amenities. These typically range from 1-2%. Check your local ordinances for details.

Health and Safety Standards for Indiana Rentals

To protect visiting guests, short-term rentals in Indiana must comply with various health, fire, and safety regulations:

Fire Safety 

State law requires functional fire extinguishers, smoke detectors, escape routes, and regular fire code compliance. Rentals are subject to periodic inspections.

Units with hot tubs or pools have additional barriers, lighting, and signage requirements. Don't cut corners on safety.

Food Safety

Any food or beverages offered to guests must meet state health codes for proper storage, prep, and labeling. Limiting offerings avoids complex compliance.

Building and Health Codes

Short-term rentals must adhere to state electrical, plumbing, egress standards, and more. Local agencies conduct housing inspections, too. Fix any identified issues promptly.

Conclusion

While Indiana lacks centralized laws, local ordinances establish key regulations hosts must follow. Hosts can build successful vacation rental businesses by researching rules, obtaining permits, collecting taxes, and prioritizing safety. Do your homework and operate thoughtfully.