sales/use tax on rental income?

Question

Hello all! New to the website and this is my first post...

I'm a new landlord so I apologize if this is a silly questions but...do I need to apply for a Sales/Use Tax license and pay sales tax on rental property income?

-Nate

Account Closed · Answer

I just wanted to post a quick follow up:

I went to the city council meeting tonight and it turns out the letter was fake...the city logo was not correct and it was not signed properly according to the cousil. They made an announcement as soon as things got under way and about half the people there left.

Why would anyone waste their money on postage and send out 100's of fake violation notices?  I'm still a little confused by it...

I guess there will be some changes made to our city Rental Housing Provisions but they won't begin addressing them until December.

Wierd, huh?

-Nate

Matthew Mucker · Answer

Nathan, don't confuse anything you see here with legal advice. Sounds like you need a lawyer familiar with your local laws. No amount of posting in forums is a replacement for that expertise.

Richard Warren · Answer

You won't pay sales tax but it is considered income for income tax purposes.  You need a good accountant to go over things for you.  You are eligible for a lot of write-offs and you don't want to lose them.  Don't wait until your tax returns are due.  You should be doing your tax planning now.

:cool:

Account Closed · Answer

Thanks for the quick response Richard,

I've actually been renting the place out for a couple years now and take full advantage off all my write-offs on my income tax.

I just recently got a letter from the city that was titled "Notice of Possible Violation"...

It's a notification that they are proposing a supplement to the city Rental Housing Provisions. One of the new provisions states that they may "require manditory inspections, and providing city with back permits, rental history, Certs of Occupancy, and payment of past due capitol expansion and utility fees, SALES AND USE TAXES."

Is scared me into thinking I was suppose to be paying quarterly sales tax.

Anyhow, there is a Public Hearing at the next City Council meeting that I plan on attending. I just wanted to make sure I wasn't in violtion. It will help me sleep a little better until the meeting  :wink:

-Nate