Are online companies (or internet-based platforms) that provide virtual marketplaces through which property owners and property management companies offer short-term rentals of property considered property management companies for business tax purposes?

No. Online companies (or internet-based platforms) through which property owners and property management companies provide short-term rentals of property are not considered property management companies for business tax purposes. Accordingly, they are not subject to business tax on the rentals of the properties. Instead, the owners of the properties or the property management companies must pay business tax on the rentals. For business tax purposes, a property management company is defined as an entity that, for a consideration, manages vacation lodgings for individual property owners who provide the lodgings for consumers for a fee. For more information on the business taxability of short-term rentals, see Important Notice 17-25.

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