Idaho’s stunning natural landscapes, growing urban hubs, and numerous outdoor recreational opportunities have fueled a steady demand for vacation rentals across the state. From city stays in Boise to tranquil getaways near Coeur d’Alene or Sun Valley, short-term rental owners cater to a diverse range of travelers throughout the year. Although Idaho does not impose a single, all-encompassing state regulation on Airbnb and other platforms, local governments hold considerable authority to regulate—or in some cases, restrict—short-term rentals. This article outlines the essential points about operating a short-term rental in the Gem State, from tax obligations to city-specific ordinances.
Idaho’s Definition of a Short-Term Rental
Idaho does not provide a universal definition of “short-term rental” in its state statutes, so local governments often shape their own standards. Many cities and counties classify “short-term” as any stay under 30 days, but this can vary by jurisdiction. Recent Idaho legislation, however, does place some limits on how strictly cities can ban short-term rentals outright, aiming to preserve property owners’ rights to rent out their homes. Nevertheless, zoning requirements, lodging taxes, and permit processes remain within the purview of local authorities.
Because of this decentralized approach, property owners considering short-term rentals should check municipal or county codes for any definitions or restrictions on nightly or weekly lodging. Familiarizing yourself with terms such as “vacation rental” or “transient occupancy” can also help clarify which local rules apply.
Starting a Short-Term Rental Business in Idaho
Most hosts in Idaho begin by confirming whether they must obtain a local business license, register for state sales taxes, or comply with other local ordinances. If you plan to form a business entity—like an LLC—you may also need to register with the Idaho Secretary of State. After addressing these foundational requirements, consider:
- Whether your local government (city or county) requires a permit or license specifically for short-term rentals.
- Any homeowners association (HOA) covenants that prohibit or limit rentals of fewer than 30 days.
- Current zoning regulations that determine if your neighborhood allows transient lodging.
Owners should also confirm if their platform (Airbnb, Vrbo, etc.) automatically collects certain taxes on their behalf, or if they must self-report rental income to state and local tax agencies.
Short-Term Rental Licensing Requirement in Idaho
Idaho does not issue a statewide short-term rental license, so the question of licensure typically falls to cities and counties. While some areas take a hands-off approach and do not require a special permit, others enforce varying degrees of oversight. For example, certain municipalities might require an inspection to ensure the property meets fire safety or occupancy standards. Other cities might ask owners to register the unit and list a local contact for emergencies.
Because these regulations differ markedly between communities, it is crucial to consult official city council meeting notes or local government websites before hosting. Attempting to operate a short-term rental without following local procedures can lead to fines or even a forced shutdown.
Idaho Short-Term Rental Taxes
Idaho enforces a state sales tax (currently 6%) on various goods and services, which can include rental charges for short-term stays. Many local governments also levy additional local option taxes or travel and convention taxes. These taxes often appear in resort towns or tourist-focused areas to help fund local infrastructure, promotions, or public projects.
If a booking platform does not handle these taxes for you, you will likely need to register with the Idaho State Tax Commission to collect and remit sales tax on rental income. In locations with an added hotel-motel tax or local sales tax, property owners must ensure they are collecting and submitting all applicable rates. Failing to remit the correct amount or submit returns on time can result in penalties or interest charges.
Vacation Rental Tax Deductions
Short-term rental owners in Idaho can typically benefit from federal tax deductions if their property is rented for more than 14 days a year and meets other IRS guidelines. Allowable deductions commonly include mortgage interest, property taxes, utilities, maintenance, insurance, and depreciation for the building and furnishings. Given Idaho’s four-season climate—requiring heating in winter, air conditioning in summer, and potential maintenance for snowy conditions—these expenses can add up. Keeping careful records and staying updated on tax rules is essential for maximizing returns on your short-term rental investment.
Short-Term Rental Regulations by Major Locations in Idaho
Boise
The capital city of Boise does not have a ban on short-term rentals, but operators must adhere to existing zoning regulations for residential areas. While Boise does not currently require a specialized Airbnb permit, hosts may need a general business license if their rental income crosses certain thresholds. The city collects a local sales and lodging tax on top of the state rate, so property owners should confirm if Airbnb or other platforms automatically remit these taxes.
Coeur d’Alene
Coeur d’Alene’s picturesque lakeside setting attracts tourists year-round. The city allows short-term rentals, but you must pay close attention to local lodging taxes and be aware of any neighborhood restrictions. Although the city has not enacted a specific short-term rental permit ordinance at the time of this writing, Coeur d’Alene actively enforces nuisance and noise ordinances, which can affect vacation rentals. Keeping the neighborhood peaceful helps maintain a favorable environment for short-term hosting.
Idaho Falls
Idaho Falls, a gateway to outdoor activities and Yellowstone region tourism, has seen increased short-term rental activity. The city primarily enforces rental codes through its zoning and building departments, focusing on safety, trash, and parking regulations. A business license may be required if you generate significant income. Hosts should verify whether their specific neighborhood or HOA has rules limiting short-term stays.
Pocatello
Pocatello generally views short-term rentals similarly to other residential leasing arrangements. While there is no strict short-term rental ban, hosts must follow any applicable city ordinances on occupancy, property maintenance, and parking. If a platform does not collect state sales tax for you, ensure you are registered with the Idaho State Tax Commission to remit these taxes. Because Pocatello regularly updates local codes, potential hosts would be wise to check the city’s official website or contact code enforcement for the latest regulations.
Sun Valley
Sun Valley and the nearby town of Ketchum are popular vacation spots known for skiing and year-round outdoor recreation. As a result, local officials keep a closer eye on vacation rentals, particularly regarding safety requirements and seasonal demand surges. Host platforms may automatically collect Sun Valley’s local option tax, but owners should confirm whether the platform includes all municipal rates and fees. Operating in this region can be highly lucrative, but staying updated on community announcements ensures you remain within legal limits.
Takeaway
Idaho’s growing popularity for tourism and outdoor recreation presents short-term rental owners with strong potential returns, but the state’s decentralized approach means you must pay close attention to local rules. Verifying any municipal permitting or licensing, adhering to HOA regulations if applicable, and remitting both state and local taxes are key steps in maintaining a legal and profitable Airbnb or vacation rental.
Because policies can vary from one county to the next, Idaho hosts should periodically review city council updates, planning commission agendas, and official government websites. As more travelers discover the Gem State’s charms, responsible and compliant short-term rental operations can contribute positively to local economies while providing memorable stays for visitors year-round.
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