Michigan vacation rental owners have tax obligations at the state, local, and federal levels. The rules are not complicated in concept — but the details matter, especially around who’s responsible for collecting and remitting each tax. Getting it wrong results in penalties, back taxes, and interest. Getting it right is mostly a matter of understanding the system and having a process.
This guide covers what you need to know. It is not tax advice — consult a CPA or tax attorney for your specific situation. But it will tell you what questions to ask and what obligations to prepare for.
Michigan imposes a 6% use tax on short-term rental accommodations for stays under 30 consecutive days. This tax is collected from the guest — it’s an add-on to the nightly rate, not a cost absorbed by the owner.
Airbnb collects and remits the 6% Michigan use tax automatically on all bookings made through their platform. You don’t need to do anything for Airbnb bookings — it’s handled.
VRBO does not collect or remit Michigan use tax as of early 2026. This means for every VRBO booking, you (or your manager) are responsible for collecting the 6% from the guest and remitting it to the Michigan Department of Treasury. The same applies to Booking.com bookings, direct bookings, and bookings from any other platform that doesn’t handle Michigan tax collection.
This is one of the most common compliance gaps we see with self-managing owners. They assume all platforms handle taxes. They don’t. If you have VRBO or direct bookings and you’re not collecting and remitting use tax, you’re out of compliance — and the state can come after you for back taxes, penalties, and interest.
If you need to collect and remit use tax yourself, register with the Michigan Department of Treasury for a use tax account. Filing is typically monthly, quarterly, or annually depending on your volume. The department provides instructions and forms on their website.
For ROAM-managed properties, we handle this entirely. We collect the use tax from guests on VRBO, direct, and other non-Airbnb bookings, and remit it on your behalf. You don’t file. You don’t track. We handle it.
In addition to the state 6% use tax, many Michigan counties and municipalities impose their own accommodation taxes or assessments. These are separate from the state tax and are typically not collected by booking platforms.
Local accommodation taxes are not universal in Michigan. Some counties impose them. Some don’t. Some cities within a county impose them even when the county doesn’t. You need to check your specific jurisdiction.
Known local tax examples: Emmet County (Petoskey/Harbor Springs area) — 5% local accommodation tax. Grand Traverse County (Traverse City area) — local assessment varies. Check with the Traverse City Tourism Convention & Visitors Bureau. Van Buren County (South Haven area) — local accommodation assessment applies. Ottawa County (Holland/Grand Haven area) — local accommodation tax applies. Mackinac County — local assessment applies.
These rates and applicability change. Always confirm current obligations with your county or municipal government. When in doubt, call the county treasurer’s office and ask: “Is there a local accommodation tax on short-term rentals at [your address]?”
In most cases, you do — or your manager does. Booking platforms typically do not collect local accommodation taxes in Michigan. This is another common compliance gap. An owner who assumes Airbnb is handling all taxes may be unaware that a 3-5% local tax is going uncollected on every booking.
Rental income from your vacation property is taxable at the federal and state level. Consult your CPA about deductions, depreciation, and reporting structure. This is where working with a tax professional becomes essential — the rules are complex and the potential savings are substantial.
Learn more about compliance and regulatory management or contact us to discuss how we handle tax collection and remittance on your behalf.
Related Guide
For Michigan-wide market context, see our Michigan vacation rental market guide.
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