Washington State Passes Short-Term Rental Legislation

Washington State Capital Building

OLYMPIA, Wash.—Last Thursday, Washington Governor Jay Inslee signed Substitute House Bill 1798, concerning short-term rentals, into law. This bill was a top priority for the Washington Hospitality Association during the 2019 Legislative Session. The bill requires short-term rentals to remit all taxes and maintain liability insurance, while also including consumer safety provisions.

“I introduced this bill to even the playing field for our local hotels,” said the bill’s prime sponsor, Rep. Cindy Ryu, D- Shoreline. “Like more and more people, I am a consumer of both vacation rentals and hotels, so I am used to paying all the same taxes when I’m in other states. It is only fair to pay the same type of taxes whether we stay at a hotel or a short-term rental.”

The new law requires short-term rental operators and platforms to register with the state Department of Revenue and remit all local, state, and federal taxes. Short-term rentals will also pay local lodging taxes.

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“I am thankful that the Washington State Legislature and State Representative Cindy Ryu are taking steps to ensure the safety of people and tourists staying in Washington while also tackling the impact of short-term rentals on affordable housing in our state,” said Ron Oh, general manager of the Holiday Inn Express & Suites North Seattle-Shoreline and Washington Hospitality Association vice chair of the board of directors and government affairs committee co-chair.

Short-term rental operators will have new consumer safety requirements as a result of this legislation. They will be required to provide consumers with the contact information of someone who may respond to guest inquiries during a stay and comply with carbon monoxide alarm laws. Short-term rental operators will also need to post the rental unit’s address, emergency services contact information, the floor plan with fire exits and escape routes, maximum occupancy limits, and the operator’s contact information in an obvious place within the short-term rental unit.

“There were many interests involved with this bill,” said Rep. Gina Mosbrucker, R-Goldendale, and a sponsor of the bill. “In the end, they got together to reach a compromise agreement. I appreciate the collaborative effort of all involved.”

One area of agreement among stakeholders surrounded the including an insurance liability protection for short-term rental operators and properties. The final bill contains a provision requiring that short-term rental operators must maintain primary liability insurance of at least $1 million to cover the rental unit. Short-term rental operators may also fulfill this requirement if they conduct the rental transaction through a platform that provides insurance coverage.

“As a former insurance agent, I’m glad short-term rental owners in Washington state will be informed of the need for them to look into their liability insurance coverages before they incur any potential business liabilities,” said Ryu.

The bill will go into effect on July 27, 2019, which is 90 days following the adjournment of the 2019 Legislative Session.