Charlotte Amalie, US Virgin Islands Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Charlotte Amalie, US Virgin Islands?

Short-term rentals through platforms like Airbnb and VRBO have become increasingly popular in Charlotte Amalie, the capital of the U.S. Virgin Islands. However, it's important for hosts to understand and comply with local regulations. Here's an overview of the key rules and requirements for operating a short-term rental business in Charlotte Amalie.

Starting a Short-Term Rental Business in Charlotte Amalie

To legally operate a short-term rental (less than 90 days) in Charlotte Amalie, you must obtain the appropriate business license from the Department of Licensing and Consumer Affairs (DLCA).

There are two main license types:

• "Short Term Rental A" - For establishments that can accommodate five or more persons. The annual license fee is $260.
• "Short Term Rental B" - For residences rented out as lodging for less than 30 days. The annual license fee is $125.

The license application process requires submitting an application form, passing a local police record check, obtaining zoning approval, and passing a fire inspection. You'll also need to provide a copy of your property deed or lease agreement.

Once licensed, you must collect and remit a 12.5% hotel tax from guests, which is handled through the Airbnb platform under an agreement with the USVI government. You may also be subject to gross receipts tax (5% after the first $9,000/month exemption) and income tax on your rental earnings.

It's critical to review your insurance coverage as well. While Airbnb provides some damage protection and liability insurance for hosts, it doesn't replace proper homeowners or renters insurance. Consult with your insurance agent to ensure you have adequate coverage.

Finally, be aware of any restrictions in your lease, condo/HOA rules, or local zoning that could prohibit short-term rentals. Some residential areas in Charlotte Amalie may not allow them.

By following these regulations and best practices, you can operate a successful and compliant short-term rental business in Charlotte Amalie. The licensing process helps ensure safety for guests and accountability for hosts. With Charlotte Amalie's popularity as a tourist destination, a well-run Airbnb can be a great source of income.

Short-Term Rental Licensing Requirement in Charlotte Amalie

To legally operate a short-term rental (less than 90 days) in Charlotte Amalie, you must obtain the appropriate business license from the Department of Licensing and Consumer Affairs (DLCA). Here are the detailed requirements based on the official DLCA website:

1. Certificate of Trade Name/Partnership and Corporation Registration from the Lt. Governor's Office.
2. Tax Clearance Letter from the Bureau of Internal Revenue. All applicants are obligated to ensure they are current with their tax obligations. Failure to maintain tax clearance may result in the business license being terminated.
3. Police Records Check conducted electronically by the DLCA Division of Licensing upon submission of the license application.
4. Zoning Approval from the Department of Planning and Natural Resources, conducted electronically by the DLCA Division of Licensing.
5. Fire Inspection by the Fire Service to ensure fire code compliance. The Fire Service will determine the nature of the review required for your business type.
6. Health Inspection by the Department of Health may be required depending on the license type (e.g. food-related businesses).
7. Board Certifications from the Office of Boards and Commissions for certain professions like architects, real estate agents, etc.

There are two main short-term rental license types:

1. "Short Term Rental A" for establishments that can accommodate five or more persons. The annual license fee is $260.
2. "Short Term Rental B" for residences rented out as lodging for less than 30 days, accommodating up to four persons. The annual license fee is $195.

To apply, submit the completed Application for U.S. Virgin Islands Business License along with the required documents and fee to the DLCA's Licensing Division. The typical processing time is not specified, but it's recommended to ensure your business is ready for inspection and has complied with all rules and regulations before submitting the application to avoid delays.

Operating a short-term rental without the proper license can result in fines and penalties. The exact amounts are not listed, but failure to comply may lead to the business being shut down by authorities. It's critical to follow the regulations, collect and remit the required 12.5% hotel tax (automatically done if you use Airbnb), and maintain adequate insurance coverage.

By carefully following these licensing requirements, short-term rental operators in Charlotte Amalie can ensure they are in full compliance with the law. The DLCA is available to provide further guidance throughout the application process.

Required Documents for Charlotte Amalie Short-Term Rentals

To apply for a short-term rental license in Charlotte Amalie, you'll need to submit the following documents to the Department of Licensing and Consumer Affairs (DLCA):

1. Application for U.S. Virgin Islands Business License: This is the main application form for the short-term rental license. It collects basic information about the applicant and the rental property. Obtain the form from the DLCA's Licensing Division.
2. Certificate of Trade Name/Partnership and Corporation Registration: This document from the Lt. Governor's Office registers your business name and structure (sole proprietorship, partnership, LLC, etc.).
3. Tax Clearance Letter: Issued by the Bureau of Internal Revenue, this letter confirms that the applicant is current on all tax obligations. The DLCA will not issue or renew a license without tax clearance.
4. Police Records Check: The DLCA's Division of Licensing will conduct an electronic police background check on the license applicant.
5. Zoning Approval: The Department of Planning and Natural Resources must confirm that the rental property is properly zoned for short-term lodging use. The DLCA facilitates this approval electronically during the application process.
6. Fire Inspection: The rental property must pass a fire safety inspection by the Virgin Islands Fire Service. The scope of the inspection depends on the rental property type. Contact the Fire Service to schedule the inspection and obtain the report.
7. Property Deed or Lease Agreement: You must provide proof that you own or legally lease the rental property. The fire inspector will require a copy of the deed or lease identifying the rental location.

Certain other documents may be required depending on the nature of your rental business:

1. Health Inspection from the Department of Health for properties providing food service.
2. Board Certifications from the Office of Boards and Commissions for certain licensed professionals involved in the business.

Submit all required documents along with the license application and fee ($260 for "Short Term Rental A" 5+ person occupancy, $195 for "Short Term Rental B" 1-4 person occupancy) to the DLCA's Licensing Division.

The DLCA will process the application, coordinate electronic approvals from other agencies, and issue the short-term rental license upon approval. Annual license renewal requires a new tax clearance and updated inspections. Operating without a valid license can result in fines and penalties.

By carefully compiling these required documents and submitting a complete license application, short-term rental operators can ensure compliance with Charlotte Amalie's licensing rules and legally welcome guests to their properties.

Charlotte Amalie Short-Term Rental Taxes

Short-term rental operators in Charlotte Amalie must collect and remit several types of taxes. Here's a breakdown of the key taxes that apply to this business:

Hotel Room Occupancy Tax: Guests renting a short-term accommodation in the USVI are responsible for paying a hotel room tax totaling 12.5% of the gross room rate or rental. This includes the base room rate plus any additional fees like energy surcharges or maintenance fees. If you list your property on Airbnb, the platform will automatically collect and remit this tax to the USVI government on your behalf under an agreement with the territory.

Gross Receipts Tax: Income from short-term rentals may be subject to the USVI gross receipts tax of 5%. However, there is generally an exemption for the first $9,000 of gross receipts per month. Taxpayers should file a yearly Form 720-B to report their gross receipts.

Income Tax: Rental income is subject to USVI income tax. The tax rates for 2024 range from 10% to 37% depending on your income bracket and filing status (single, married filing jointly, etc.). Rental income and expenses are reported on Form 1040-SS, which is the USVI equivalent of the federal income tax return.

It's important to note that if you rent out your property for fewer than 15 days per year, the rental income is typically not subject to income tax. However, you also cannot deduct any rental expenses in this scenario.

Possible Deductions and Write-Offs

Short-term rental operators can deduct many of the expenses associated with running their business. Some common deductible expenses include:

1. Cleaning and maintenance costs
2. Utility payments
3. Advertising and platform commissions (like Airbnb service fees)
4. Insurance premiums
5. Property taxes
6. Mortgage interest
7. Legal, management, and professional fees
8. Local travel expenses
9. Depreciation on the rental property

To claim these deductions, you'll need to keep careful records of your rental income and expenses. Consult with a qualified tax professional to ensure you are properly tracking and reporting your short-term rental finances.

By understanding the applicable taxes and allowable deductions, short-term rental operators in Charlotte Amalie can stay compliant with USVI tax laws while maximizing their business income. The 12.5% hotel room tax is a pass-through to guests, while the gross receipts and income taxes apply to the host's earnings. Proper planning and reporting can help minimize your tax liability.

US Virgin Islands Wide Short-Term Rental Rules

While there are no specific US Virgin Islands-wide laws governing short-term rentals, the Department of Licensing and Consumer Affairs (DLCA) has implemented licensing requirements that apply to all hosts in the territory, including those in Charlotte Amalie.

As of July 1, 2021, the DLCA requires all short-term rental operators to obtain a business license. There are two license types:

1. "Short Term Rental A" for properties accommodating five or more persons, with an annual fee of $260.
2. "Short Term Rental B" for properties accommodating up to four persons, with an annual fee of $195.

To obtain the license, hosts must submit an application to the DLCA along with a local police record check, zoning approval, and fire inspection. The license must be renewed annually, and the DLCA will request a tax clearance from the Virgin Islands Bureau of Internal Revenue (VIBIR) as part of the renewal process.

In addition to the license, hosts are responsible for collecting and remitting a 12.5% Hotel Room Occupancy Tax from guests. If listing on Airbnb, the platform will automatically collect and remit this tax to the VIBIR under an agreement with the USVI government. Hosts using other platforms or managing their own bookings are responsible for handling this tax independently.

Short-term rental income may also be subject to a 5% Gross Receipts Tax, with an exemption for the first $9,000 of gross receipts per month, and USVI income tax. Hosts should consult a tax professional and file the appropriate forms with the VIBIR.

It's important for Charlotte Amalie hosts to also comply with any restrictions set by their lease, condo/HOA rules, or neighborhood organizations, as some may prohibit short-term rentals. The DLCA's licensing process helps HOAs monitor and enforce short-term rental activity in their communities.

By obtaining the required license, collecting occupancy taxes, and following all applicable rules, short-term rental hosts in Charlotte Amalie and throughout the US Virgin Islands can operate their businesses legally and responsibly. The DLCA and VIBIR are available to provide further guidance to ensure full compliance with the territory's requirements.

Does Charlotte Amalie Strictly Enforce STR Rules?

Based on discussions among hosts on forums like Bigger Pockets and Reddit, it appears that enforcement of short-term rental regulations in Charlotte Amalie is relatively lax compared to many other cities. While the US Virgin Islands government has implemented licensing requirements for STRs territory-wide, many hosts report operating without much oversight or interference from authorities.

One key reason for this seems to be that the licensing process is still quite new, having only gone into effect in July 2021. The Department of Licensing and Consumer Affairs (DLCA) is tasked with issuing STR licenses and monitoring compliance, but with limited resources, proactive enforcement efforts have been minimal so far.

Additionally, the main intent behind the licensing law was to enable the collection of hotel taxes from STR operators, rather than to heavily restrict the practice. Hosts listing on Airbnb have the 12.5% hotel tax automatically collected and remitted by the platform under an agreement with the USVI government. This satisfies a major goal of the regulations.

Many hosts on the forums express the view that as long as you're staying under the radar by avoiding complaints from neighbors, keeping a low profile, and collecting the required taxes, you can operate an STR in Charlotte Amalie without much fear of crackdowns or penalties from the DLCA or other agencies. The lack of proactive enforcement has led to a proliferation of STR listings, many likely unlicensed.

That said, the DLCA has made it clear they intend the licensing requirement to help HOAs and condo boards enforce restrictions on STRs in their communities. Hosts in developments with strict anti-STR policies may face a higher risk of enforcement action if reported to the authorities. But in neighborhoods without such restrictions, the STR market seems to be thriving.

So in summary, while Charlotte Amalie and the USVI have a licensing and tax collection regime in place for STRs, the light approach to enforcement makes the city a relatively friendly place to operate compared to stricter markets. Hosts should still do their due diligence and abide by all regulations, but many are operating STRs successfully, even if not fully above board in the eyes of the law.

How to Start a Short-Term Rental Business in Charlotte Amalie

Starting a short-term rental business in Charlotte Amalie can be a rewarding venture, but it's important to follow the proper steps to ensure compliance with local regulations and set yourself up for success. Here's a numbered list of key steps to get started:

1. Research local regulations: Familiarize yourself with the STR licensing requirements set by the Department of Licensing and Consumer Affairs (DLCA), as well as any zoning restrictions, HOA rules, or lease provisions that could impact your ability to operate an STR in your desired location. Understanding the legal landscape is crucial to avoid penalties and operate above board.
2. Prepare your property: Assess your property's suitability for short-term rentals and make any necessary upgrades or repairs to meet guest expectations. Consider factors like parking, amenities, and safety features. Invest in quality furnishings, linens, and decor to create an inviting space that will attract bookings and positive reviews.
3. Obtain necessary licenses and permits: Apply for the appropriate STR license from the DLCA - either "Short Term Rental A" for 5+ person occupancy or "Short Term Rental B" for 1-4 person occupancy. Submit the required documents, including a police record check, zoning approval, fire inspection, and property deed/lease. Pay the annual license fee ($260 for A, $195 for B) and renew yearly with a tax clearance.
4. Set up your business entity: Choose a business structure (sole proprietorship, LLC, etc.) and register your trade name with the Lt. Governor's Office. Obtain an EIN from the IRS for tax purposes. Open a separate bank account to keep your rental finances organized. Consult with a CPA or attorney to ensure proper setup and compliance.
5. Implement a pricing strategy: Research comparable STRs in your area to determine competitive nightly rates. Consider factors like seasonality, events, and demand fluctuations. Set your prices to maximize occupancy and revenue while covering your expenses and ensuring profitability. Utilize dynamic pricing tools to automatically adjust rates based on market conditions.
6. List your property on STR platforms: Create listings on popular STR platforms like Airbnb and VRBO. Craft compelling descriptions, take high-quality photos, and highlight your property's unique features and location. Set up your calendar, booking settings, and house rules. If listing on Airbnb, opt in to the hotel tax collection agreement to have the 12.5% tax automatically collected and remitted.
7. Manage your bookings and guests: Establish a system for handling inquiries, booking requests, check-ins, and check-outs. Communicate promptly and professionally with guests. Provide detailed arrival instructions and property information. Consider hiring a cleaning service to turnover the property between stays. Respond to any issues or maintenance needs in a timely manner to ensure guest satisfaction.
8. Comply with tax obligations: In addition to the hotel tax, be aware of your gross receipts and income tax obligations. Track your rental income and expenses diligently. File the necessary forms with the Virgin Islands Bureau of Internal Revenue (VIBIR) and pay any taxes owed. Consult a tax professional to ensure full compliance and maximize deductions.
9. Promote your listing and build your brand: Leverage social media, targeted advertising, and cross-promotion to attract bookings. Encourage satisfied guests to leave reviews and refer others. Develop a brand identity and provide a consistent, high-quality experience to build loyalty and drive repeat business.
10. Continuously improve and adapt: Monitor your performance metrics, guest feedback, and market trends. Make data-driven decisions to optimize your pricing, marketing, and operations. Stay informed about regulatory changes and industry best practices. Reinvest in property upgrades and amenity enhancements to stay competitive and meet evolving guest expectations.

By following these steps and implementing the tips provided, you can successfully launch and grow a short-term rental business in Charlotte Amalie. While the regulatory environment is relatively lenient compared to some cities, it's still crucial to operate responsibly and comply with all applicable rules to mitigate risk and maintain positive relationships with guests, neighbors, and authorities.

Who to Contact in Charlotte Amalie about Short-Term Rental Regulations and Zoning?

If you have questions or concerns about short-term rental regulations and zoning in Charlotte Amalie, there are several key government agencies and resources you can contact for guidance:

Department of Licensing and Consumer Affairs (DLCA): The DLCA is responsible for issuing business licenses for short-term rentals in the US Virgin Islands. Contact their office for information on the licensing process, requirements, and enforcement.

1. Address: Property & Procurement Building, 8201 Sub Base, Suite 1, St. Thomas, VI 00802
2. Phone: (340) 774-3130
3. Email: consumerawareness@dlca.vi.gov
4. Website: www.dlca.vi.gov

Department of Planning and Natural Resources (DPNR): The DPNR handles zoning approvals for short-term rentals. Reach out to their office to inquire about zoning restrictions and the approval process.

• Address: Charles W. Turnbull Regional Library, 2nd Floor, 4607 Tutu Park Mall, St. Thomas, VI 00802
• Phone: (340) 774-3320
• Email: info@dpnr.vi.gov
• Website: dpnr.vi.gov

Virgin Islands Bureau of Internal Revenue (VIBIR): The VIBIR administers tax laws in the US Virgin Islands, including hotel taxes, gross receipts taxes, and income taxes that apply to short-term rentals. Contact them for tax-related questions and forms.

• Address: 6115 Estate Smith Bay, Suite 225, St. Thomas, VI 00802
• Phone: (340) 715-1040
• Email: vibir@vibir.gov
• Website: bir.vi.gov

In addition to these government agencies, there are several online communities and resources that Charlotte Amalie hosts may find helpful:

• USVI Airbnb Hosts Facebook Group: This private Facebook group is a platform for Airbnb hosts in the US Virgin Islands to connect, share experiences, and seek advice from fellow hosts. You can request to join at https://www.facebook.com/groups/1569340046724325/.
• Virgin Islands Vacation Rentals & Property Management Association (VIVRPMA): VIVRPMA is a non-profit trade association representing the vacation rental and property management industry in the US Virgin Islands. They provide education, advocacy, and resources for members. Learn more at https://www.vivrpma.org/.
• Airbnb Help Center: Airbnb provides a wealth of information for hosts in their Help Center, including articles on local regulations, taxes, and best practices. Start exploring at https://www.airbnb.com/help/hosting.
• BiggerPockets Forums: BiggerPockets is a popular online community for real estate investors, including short-term rental hosts. Their forums contain valuable discussions and insights on various aspects of the STR business. Check out the "Short-Term Rental" subforum at https://www.biggerpockets.com/forums/530-short-term-rental.

By reaching out to these government contacts and engaging with the host community through online resources, you can get the information and support you need to navigate the regulatory landscape and operate a successful short-term rental business in Charlotte Amalie.

What Do Airbnb Hosts in Charlotte Amalie on Reddit and Bigger Pockets Think about Local Regulations?

After searching through various online forums and communities, there doesn't appear to be much discussion specifically from Charlotte Amalie Airbnb hosts about the local short-term rental regulations. However, here are a few relevant threads that provide some insight into the STR landscape in the US Virgin Islands:

Reddit /r/virginislands thread on vacationing in St. Thomas: In this thread, a user asks for recommendations on what to do during their week-long stay in an Airbnb in St. Thomas. While not directly about regulations, the responses indicate that short-term rentals are readily available and popular with tourists visiting the island. (Source)

Reddit /r/travel thread on the best Caribbean islands for a first visit: Several commenters recommend St. John and St. Thomas in the US Virgin Islands as great destinations, noting the ease of getting there, beautiful beaches, and good infrastructure for visitors. One user specifically mentions taking a ferry from Charlotte Amalie to St. John, suggesting that Charlotte Amalie serves as a transit hub for STR guests exploring the islands. (Source)

Reddit /r/virginislands thread on honeymooning in St. Thomas: An engaged couple asks for local recommendations on unique experiences beyond the typical tourist activities during their honeymoon stay in St. Thomas. Commenters provide suggestions on restaurants, day trips to neighboring islands, and the popularity of Airbnb rentals in the area. (Source)

While these threads don't directly address the opinions of Charlotte Amalie hosts on the local regulations, they do paint a picture of a destination where short-term rentals are common and well-utilized by visitors. The lack of discussion around regulatory issues could suggest that the STR environment is relatively relaxed and not a major point of concern or frustration for hosts.

It's worth noting that the search did not surface any relevant threads on Bigger Pockets or other real estate investing forums specific to Charlotte Amalie or the US Virgin Islands. This may be due to the smaller market size compared to major US metropolitan areas that tend to dominate the conversation on those platforms.

To get a more comprehensive understanding of host sentiments, it would be beneficial to connect with local STR groups, property managers, or individual hosts in Charlotte Amalie. They can provide first-hand accounts of their experiences navigating the regulatory landscape and any challenges or successes they've encountered.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.