What do I need to know about Short Term Vacation Rentals on Bainbridge Island?

All Short-Term Rentals must register for a Short-Term Rental Certificate with the City of Bainbridge Island

Effective September 30, 2024, all Short-Term Rentals must register with the City of Bainbridge Island for a Certificate to operate (BIMC 5.38). The fee to register is published in the City's Fee Schedule. Short-term rental Certificates are valid for one year from the date of issue.  

Online registration is quick and easy if you have your Business License Number handy (UBI#), click here for the Online Short-Term Rental Registration Portal.  

https://portal.deckard.com/wa-kitsap-city_of_bainbridge_island-str-portal/

Ready to renew your Short-Term Rental Certificate?

Start by logging in to the same registration portal and follow the instructions to renew.

Once your Short-Term Rental Application is approved, you'll receive a copy of the City's Short-Term Rental Emergency Preparedness Guide - a helpful reference for both you and your guests on what to do in the event of an emergency.

Visit the Short-Term Rental Public Portal to:

  • View the location of registered short-term rentals on the island
  • View local contact information for registered short-term rentals
  • Submit a complaint

https://str-public-portal.deckard.com/bi

State & City Business Licenses, State & City Business & Occupation Tax (B&O), Lodging Taxes, and Primary Liability Insurance are all required for short-term rentals on Bainbridge Island in addition to the Bainbridge Island Certificate.

WA-DOR Business Licensing Service
https://dor.wa.gov/
360-705-6741
State & City

State & City



Primary Liability Insurance
Min Policy $1 Million

Lodging Tax
BIMC 3.65


What is the difference between a long-term or short-term rental?

Short term rentals are residential rental agreements lasting less than 31 days at a time, while long term rentals last 31 days or more.  Short-term rentals are commonly associated with rentals hosted on AirBnb and VRBO, but they are not limited to online rental platforms.   

I am the property owner and I have a short term rental – what do I need to be compliant with the City and State?

The Property Owner needs six things for short term rental compliance:

  1. Obtain an annual State Business License
    • Use NAICS Code 721199 – All Other Traveler Accommodation
  2. Obtain an annual City of Bainbridge Business License endorsement 
    • Use NAICS Code 721199 – All Other Traveler Accommodation
  3. Obtain a City of Bainbridge Island Short-Term Rental Certificate
  4. File an annual Business & Occupation (B&O) Tax Return with the State
    • May be offered through the rental platform
  5. File an annual Business & Occupation (B&O) Tax Return with the City
    • May be offered through the rental platform
  6. File monthly Lodging Taxes with the State of Washington
    • May be offered through the rental platform
  7. Maintain primary liability insurance (minimum $1 Million) to cover the short term rental unit
    • May be offered through the rental platform

I am the property owner, but I use a property management company (e.g. Vacasa) to manage my rental.   Who needs to get a business license: myself, the property manager, or both? 

Both.  Property owners (i.e. Operators) and Property Managers/Management Companies (Managers) are required to obtain a City Business License and City Short-Term Rental Certificate before renting all or a portion of a home on Bainbridge Island, as it is considered “engaging in business” per BIMC 5.05.030.  This applies to both long and short-term rentals.  Rental platforms, such as AirBnb or VRBO, have different laws governing their business with the State.

What code should I use when applying for my business license? 

When applying for a State/City Business License, you will be asked to enter the type of business as it fits within the North American Industry Classification System (NAICS).  The correct NAICS code for a short term rental is 72119 Other Traveler Accommodation
 
72 Accommodation and Food Services → 7211 Traveler Accommodation → 72119 Other Traveler Accommodation

Need help adding the Bainbridge Island City Endorsement to your existing Washington State Business License (UBI#)? This link details the steps: https://dor.wa.gov/manage-business/my-dor-help/renew-or-update-business-license#Addcity

Aren’t Business & Occupancy taxes and Lodging taxes the same thing?

No. The City B&O tax is a separate tax from the housing and vacation rental taxes instituted by the State of Washington.  It is the property owner’s responsibility to ensure the City B&O Tax Report and Lodging Taxes are filled annually. Discuss with your property manager and/or rental platform to confirm whether they’ll complete this tax reporting on your behalf as part of their service.

What is the City Business & Occupancy (B&O) Tax?

The City’s B&O Tax is a tax that is measured on the value of products, gross proceeds of sales, or gross business income in the City.   This is considered a ‘gross receipts tax’, and therefore there are no deductions for labor, materials, or other costs of doing business.  Businesses with a gross revenue of more than $150,000 are subject to the City B&O tax of 1/10th of 1% (0.001).

If the gross revenue of my short term rental is less than $150,000, do I need to file a City B&O tax return?

Yes, you still need to file a City B&O tax return, but you will owe no tax.

What is the Lodging Tax? (and what is it used for?)

The Lodging Tax (also called Hotel-Motel Tax) is a sales tax on all lodging accommodation charges for stays lasting less than 30 days (e.g. hotels, motels, inns, bed & breakfasts, RV parks, and short term rentals).  The Lodging Tax on Bainbridge Island is 4% of the total lodging bill.  These funds collected by the property owner (or manager), paid to the State monthly or quarterly, and then distributed to the City by the State. The City, through its Lodging Tax Advisory Committee (LTAC), awards contracts to vendors promoting tourism in the City. They can also be used to repaying bonds issued for affordable housing.

Do I need to register my Bed & Breakfast as a Short-Term Rental?

No, you do not need to register your Bed & Breakfast as a Short-Term rental.

What if the rental property is both my primary residence AND I plan to stay on the property while it's being rented?

You will still need to register your short term rental if the property is both your primary residence and you plan to stay on the property while it's being rented, but you will be exempt from the 300 foot neighbor notices and the exterior sign requirements.

Where can I learn more about Washington State regulations regarding short term rentals?

Washington State Legislature RCW 64.37

https://mrsc.org/explore-topics/finance/revenues/lodging-tax

https://dor.wa.gov/open-business/apply-business-license