What Type of Business License Do You Need for Airbnb? A Step-by-Step Guide for Hosts

Both short-term rentals and hotel accommodations operate on the same key principle: providing temporary lodging (accommodation) for travelers.

The primary goal of both rental models is to generate profit from a property, which is why many laws and regulations apply to both.

One such requirement is to obtain a business license, which officially recognizes your short-term rental as a business. This ensures you comply with local laws and utilize the benefits the government offers to businesses. 

A business license is also important for tax purposes. It enables the government to collect the appropriate revenue from your rental income.

But what type of business license does Airbnb require? Are there other permits needed for short-term rentals? Read this guide to find out!

Is a Business License Required for Airbnb STR?

This is not a one-size-fits-all kind of question.

The answer depends on your location—the exact rental and licensing rules differ from country to country, state to state, and city to city. 

So, yes, you may require a STR business license to operate in your area. 

For example, to legally operate an Airbnb short-term rental (STR) business in most California cities, you need to obtain a business license, register your property with the city, and potentially get a specific STR permit or license.

You should check and understand the local government laws to find answers for you. This is an important Airbnb hosting tip, so make sure you follow it. 

And if your properties fall under a condo association or an HOA, there are going to be other rules to follow along with having a license. 

What is a Business License for Airbnb Hosts?

A business license for Airbnb hosts is an official permit required by many cities to legally operate a short-term rental property.

It ensures that hosts comply with local laws, zoning regulations, and tax requirements while running their rental as a business. This way, you can conduct rental activities legally within a particular jurisdiction.

Depending on the location, it can be classified under general business licenses or as a “Short-Term Rental License”.  

The requirements and fees vary by location, but it is a key step in starting an Airbnb operation. Many municipalities treat hosting on platforms like Airbnb as a business activity, making this license necessary.

Requirements to Obtain a Business License

Since the nature of a business license for STR depends on local laws, the requirements to obtain it also vary. Typically, it requires to submit the following information:

• Property information (address, bedroom count, maximum number of guests)
• Property ownership proof or proof of right to occupy
• Property owner/host information (name, contact details, email address)
• Tax account information (rental unit business tax account number, TOT certificate number)
• STR occupancy operation information (number of STR days/year, booking activity proof)
• Home share license (if applied)
• Property advertisement information (platform used, host/account ID number)
• Payment information.

• Passing a home inspection
• Non-refundable application fee

When submitting your STR information, you choose your business structure, register your business name, select the license type needed, pay the fee, and submit the application. 

Other Licenses and Permits You Need for STR

Other licenses and permits are also required to run a short-term rental along with a business license. And many hosts often mix and confuse them all with each other.

To make things easier for you, here are other licenses and permits that you may need:

Short-Term Rental Permit

Some locations require a specific short-term rental permit to operate property on platforms like Airbnb, along with a business license. 

This is designed to regulate properties being rented for short stays. It helps cities maintain control over the number of short-term rentals in residential areas.

For example, San Francisco, New York, Austin, and cities in California like Malibu and Santa Rosa. 

These have specific rules governing how and when properties can be rented out, often including limits on how many nights a year a property can be rented. 

Zoning Permit

Zoning laws dictate what types of activities can take place in specific areas.

If your property is in a residential zone, you may need a zoning permit to ensure you are allowed to operate a short-term rental.

Zoning laws vary widely by city, and some may restrict or completely ban short-term rentals in certain neighborhoods. 

This is particularly important for hosts in areas with stringent residential zoning regulations.

Health and Safety Inspections

Many cities require Airbnb properties to comply with health and safety standards, including fire safety, cleanliness, and building codes.

Hosts may need to schedule inspections to ensure their properties meet local health regulations. 

This is important not only for guest safety but also to avoid penalties or legal action. Some locations might require periodic re-inspections to maintain these standards.

Home Occupation Permit

Some municipalities might require a home occupation permit if the Airbnb property is part of your home. This type of permit regulates businesses operated out of a residential property.

While the requirements for this permit vary, it is generally required if the host is living in the same property they are renting out for short-term stays.

Tax and Revenue Permits

When operating an Airbnb, hosts are subject to tax obligations as per their location. These include state sales tax, transient occupancy tax (TOT), and other local tourism-related taxes. 

You should register for tax purposes to avoid penalties, as short-term rentals are often treated like hotels by tax authorities.

For example, cities like San Francisco and Los Angeles enforce TOT, which typically collects a certain percentage tax on the booking fee. 

In many regions, Airbnb automatically collects and remits taxes on behalf of hosts. However, this doesn’t apply universally, so verify whether your city is covered. 

Hosts can find their tax responsibilities detailed on Airbnb’s Tax Collection and Remittance page, and local government websites offer more specific tax requirements for each location. 

The IRS Small Business Tax Center is a useful resource for U.S. tax filings to ensure compliance.

How Can You Get a Short-Term Rental Permit?

As mentioned earlier, some states and cities also require a STR permit along with the general business license. If your local jurisdiction requires it, you can get it easily.

While the actual process varies by location, some common steps include:

First, check your local government’s rules.

Some cities require permits, while others have restrictions on short-term rentals. Visit your city’s website or call the local office for accurate information.

Create an online account on the official government website before you apply. 

Next, gather the necessary documents. You may need proof of property ownership, tax registration, utility bills, and floor plans. 

If required, register your business before applying for the STR permit. Some cities treat Airbnb rentals as businesses and require a separate license.

Get a home inspection done (if required) to ensure your rental meets safety regulations.

After that, submit your application and pay the required fees.

Once approved, you will receive a permit number, which should be added to your Airbnb listing. Now, you can operate legally and avoid fines or legal issues.

Conclusion

To run an Airbnb legally, you need the right business license. The license type depends on where your property is located since rules vary by city and state. 

In many places, you also need extra permits, like a short-term rental permit or a zoning permit. Some cities require safety inspections, too. 

Before you list your property, check with your local government to see what’s required.

When you get the right licenses and permits, they help you avoid fines and keep your Airbnb business running smoothly.