A guide for New Albany short-term rental owners who want every rule handled before the first guest arrives
Before a New Albany home takes its first guest, an owner needs to know the tax on every stay, the city registration, the city noise and trash rules, the state smoke detector law, and the platform rules on cameras, parties, and service animals. None of these items are hard. All of them cost money when they are missed.
The tax on every stay under 30 nights is 13%
Every stay under 30 nights in New Albany carries 7% Indiana sales tax plus 6% Floyd County innkeeper’s tax. That is 13% on top of what the guest pays for the room. The Floyd County rate went up from 4% to 6% on December 1, 2019, and it has been 6% ever since.
The same 7% state sales tax applies across Indiana. The county share changes with the county line. Clark County next door is also 6%. Monroe County is 5%. Brown County is 8%. A New Albany owner only needs the Floyd County figure, and that figure is 6%.
The platforms remit for you and direct bookings do not
Airbnb and Vrbo collect and remit both the 7% sales tax and the 6% Floyd County innkeeper’s tax on every stay booked through them. An owner who books only through those two platforms does not have to register with the state for sales tax.
Direct bookings change the job. A direct booking is any stay that does not run through a platform that collects the tax. The operator registers for a Registered Retail Merchant Certificate at $25 per location. Filing happens in INTIME, the Indiana Department of Revenue‘s online system, and the tax is remitted every month.
The monthly deadline depends on how much tax the property collects. If the average monthly tax was $1,000 or less, the return is due 30 days after the end of the month. If the average was over $1,000, the return is due 20 days after the end of the month. Floyd County innkeeper’s tax on direct bookings is filed with the Indiana Department of Revenue along with the sales tax.
Fees are taxed and 30-night stays are exempt
Sales tax does not stop at the nightly rate. It applies to the cleaning fee, the pet fee, the damage fee, the resort fee, the parking fee, and the cancellation fee.
Stays of 30 or more consecutive nights are exempt from both the sales tax and the innkeeper’s tax.
A quick list of the tax items to check before a New Albany home goes live:
- The listing shows the 13% total tax on stays under 30 nights.
- Platform bookings are set so Airbnb and Vrbo collect and remit.
- If direct bookings are on, the $25 Registered Retail Merchant Certificate is in place and INTIME is set up.
- The monthly filing date is on the calendar.
- Cleaning, pet, and other fees are taxed.
- Stays of 30 nights or more are marked exempt.
New Albany’s rental registration is $5 and due January 31
New Albany has no short-term rental ordinance, permit, or registration in its city code.
The city does have a rental registration rule in Chapter 159 of the city code. It reads this way: every rental unit without a homestead exemption registers with the city and holds a rental permit. The fee is $5 per unit per year, due January 31. The owner applies. An owner who lives outside Floyd County or a county that borders Floyd names a local agent. The permit expires 30 days after the property sells, so a buyer registers again.
The penalties are larger than the fee. Operating with no permit runs up to $100 per day, and up to $500 for a repeat. Registering late runs up to $100 per day. Unpaid fines become liens on the property. The Rental Registration office is at 812-948-5333.
Noise and trash rules
New Albany’s noise rule sits in Chapter 96 of the city code. It has no decibel limit and no set quiet hours. A first fine is $150. A second fine within 6 months is $300. A third is $500. Because there is no set hour and no meter reading, the complaint is what triggers the fine, and the complaint comes from a neighbor.
The trash rule sits in Chapter 50. Containers stay on the property and out of the right of way. The fine is $25 to $100.
Smoke detectors are state law with a 7-day repair window
Indiana law requires smoke detectors in every rental home. There is one outside each sleeping area and one on each level of the home, including the basement. When an owner gets written notice that a detector is missing or broken, the repair happens within 7 working days.
Outside the city, Floyd County zoning has its own steps
Some New Albany area homes sit in Floyd County outside the city limits. The rules there are different. In unincorporated Floyd County, “Bed and Breakfast/Tourist Home” is a conditional use in the AR, RR, RS, RU, and MF districts. The county Board of Zoning Appeals hears conditional use requests for short-term rentals.
State law sets the backdrop for both the city and the county. Indiana defines a short-term rental as a home or unit rented for terms under 30 days through a short-term rental platform. Owner-occupied short-term rentals are a permitted residential use anywhere homes are allowed, and a city or county cannot zone them out. Non-owner-occupied short-term rentals may be required to get a special exception, special use, or variance, and the city or county may not use that process to prohibit them. Denials can be appealed.
Where a local permit exists in Indiana, state law caps the fee at $150, sets renewal at $0, limits it to one permit per property, and requires the permit to be issued within 30 days. A permit can be revoked only after 3 or more citations in one calendar year, and only for up to 1 year. Renting without a required permit is a Class C infraction per transaction. HOA and condo rules still apply on top of all of this.
Whether the county conditional use step touches your home depends on your property and your district.
Hot tubs, fire pits, and fireworks have their own rules
A single-family home rented to tourists more than 3 times or 10 days a year is a “tourist home” under Indiana pool rules. Its pool or hot tub is treated as semipublic. The chemistry rules are specific. Chlorine runs 1 to 7 ppm in a pool and 2 to 7 ppm in a spa. The spa maximum is 104°F. The pH runs 7.2 to 7.8. Testing happens at each guest change. A lab sample goes out monthly. A first-aid kit is on site. Printed spa warnings are posted.
In Floyd County, semipublic pools also need an operating permit and a certified pool operator.
Indiana allows fireworks on the guest’s own property or with the owner’s permission, from 9 a.m. to 11 p.m., with later hours on holidays. A short-term rental guest needs the owner’s permission.
Fire pits burn clean wood only. Someone attends the fire the whole time. Extinguishing equipment is on hand. Burn bans apply when the county issues them.
Cameras, parties, and service animals follow platform rules and state law
The platforms set the camera rules. Airbnb has banned indoor cameras since April 30, 2024, even when the camera is off. Outdoor cameras must be disclosed in the listing, and none may point where a guest expects privacy. Noise monitors that do not record audio are allowed if disclosed, and not in bedrooms or bathrooms. Vrbo allows no cameras or audio inside or pointed inside, and outdoor cameras must be disclosed before booking.
The platforms set the party rules too. Airbnb has had a permanent ban on disruptive gatherings of any size and on “party-friendly” listings since June 28, 2022. Vrbo has zero tolerance for broken anti-party house rules. In New Albany, a party also lands on the Chapter 96 noise fines above. We set a two night minimum on nearly every booking. A two night minimum is how we protect a home from parties.
Service animals follow state law and platform rules together. Airbnb and Vrbo require hosts to accept service animals with no fees and no documentation. Indiana’s service animal law has no small-property exemption.
One more state rule protects the owner. A guest who refuses to leave after the owner’s agent asks commits criminal trespass, a Class A misdemeanor. A property manager is the owner’s agent.
The bottom line
The New Albany rules are short, and the tax is 13% on every stay under 30 nights. Airbnb and Vrbo remit that tax on platform bookings, and direct bookings need a $25 certificate and a monthly filing. The city has no short-term rental ordinance, and its rental registration for units without a homestead exemption costs $5 and is due January 31. The noise fine is triggered by a complaint.
Have any questions, or want a personal property analysis on a specific property? Call or text Joseph at 812-778-2235, email [email protected], or visit hearthandhavenhosting.com.
Safe travels,
Joseph and Laura
Hoo-Hoo-Hoo-Hoosiers!