Occupancy and Lodging Taxes on Direct Bookings: US, Canada and UK

On Airbnb and Vrbo, occupancy tax often happens in the background: in many places the platform adds it to the guest's bill and pays it to the tax office for you. When a guest books directly, nobody does that for you. You add the tax to the price, collect it with the payment, and file it with every authority that charges it: often the state or province, the county and the city.

This guide explains how lodging taxes are layered in the US, Canada and the UK, gives examples of current rates, and shows how to charge them on a direct booking with a worked example in US dollars.

Rates and rules differ by state, province, county and city, and they change often. The figures below were correct at the time of writing (October 2026) according to the official sources linked. Treat this guide as a starting point, not tax advice, and confirm your own rates with your tax office or an accountant.

Why direct bookings are different

Platforms collect tax only on the bookings they process. If you take a booking through your own website, by phone or from a returning guest, the platform isn't involved, so the tax is yours to collect.

Tax offices say this plainly:

• British Columbia: online marketplaces collect PST and the municipal hotel tax on their own sales, but if you also rent through other channels you must register to collect PST and MRDT on those sales yourself.
• Toronto: registered short-term rental operators collect the Municipal Accommodation Tax on their rentals and leave out only the bookings a platform already collected for.
• Florida counties: several county tax collectors ask hosts to open their own tourist tax account if they take payments that don't go through a registered platform.

So the first step for any host taking direct bookings is the same: find out which taxes apply at your address, and register for each one before your first direct guest arrives.

United States: state, county and city layers

There is no federal occupancy tax in the US. Instead, a short stay can carry several local taxes at once:

• State sales or lodging tax. Many states charge sales tax or a dedicated lodging tax on stays shorter than a set period.
• County tax, often called a tourist development tax or transient occupancy tax.
• City tax, often called a hotel occupancy tax or transient occupancy tax (TOT).
• Special district taxes in some tourist areas or convention districts.

Two examples show how different states can be:

In both states the combined rate depends on the county, and each layer can have its own registration and filing schedule.

What the tax is charged on

Don't assume the tax applies only to the nightly rate. In many places it applies to the whole amount the guest must pay to stay, so a mandatory cleaning fee is often taxable, while optional extras may not be. Florida, for example, generally treats charges the guest has to pay as a condition of the stay as part of the taxable rent. Check how your state and county define the taxable amount before you set up your prices.

Canada: GST/HST plus provincial and municipal taxes

In Canada, two systems can apply to a short stay.

GST/HST

Stays of less than a month are generally a taxable supply for GST/HST. At the time of writing the rates are:

• 5% GST in Alberta, British Columbia, Manitoba, Quebec, Saskatchewan and the territories;
• 13% HST in Ontario;
• 14% HST in Nova Scotia (reduced from 15% on 1 April 2025);
• 15% HST in New Brunswick, Newfoundland and Labrador, and Prince Edward Island.

You only have to register and charge GST/HST once your taxable revenue goes over the $30,000 small supplier threshold (counted across all your business activities, not just one rental). Below that, registration is optional. The Canada Revenue Agency explains the threshold and how to register. If you use platforms too, note that they collect GST/HST only on the bookings they handle.

Provincial and municipal accommodation taxes

On top of GST/HST, most provinces and many cities add their own tax:

Other Ontario municipalities set their own accommodation tax, and Atlantic provinces and other cities have their own rules, so check with your municipality.

Order matters. In Toronto, the City says the MAT is itself subject to HST if you're registered for HST. Three nights at C$200 is C$600; MAT at 6% adds C$36; if you're HST-registered, 13% HST on C$636 adds C$82.68, for a total of C$718.68.

United Kingdom: VAT and the new visitor levies

The UK has no general occupancy tax, but that's changing city by city.

• Edinburgh became the first UK city with a visitor levy. It's 5% of the cost of the accommodation, charged for up to five consecutive nights, on stays from 24 July 2026 that were booked and paid for on or after 1 October 2025. Accommodation providers, including short-term lets, are liable for it and file quarterly returns. See the City of Edinburgh Council announcement.
• Glasgow has approved its own 5% levy, expected to apply to stays from January 2027. Check Glasgow City Council for the final rules.
• Wales has passed a law allowing councils to charge a visitor levy of £1.30 per person per night for most accommodation (75p for hostels and campsites). The earliest start date is April 2027, and Cardiff is the first council to adopt it. Every visitor accommodation provider in Wales must also join a national register run by the Welsh Revenue Authority, whether or not their council charges the levy. See Business Wales for registration details.
• England and Northern Ireland have no visitor levy in force at the time of writing.

A worked Edinburgh example: a seven-night stay at £150 a night. The levy applies to five nights only, so it's 5% × £750 = £37.50, not 5% of the full £1,050.

VAT: holiday lets are a standard-rated supply in the UK (20%). You only have to register and charge VAT once your taxable turnover goes over the £90,000 registration threshold in any 12 months. Most single-property hosts are below it, but check with HMRC or your accountant if you run several lets.

How to charge occupancy tax on a direct booking

The method is the same everywhere:

1. List every tax that applies at your address and the base it's charged on (nightly rate only, or rate plus mandatory fees).
2. Register with each authority before your first direct booking: state or provincial tax office, county, city.
3. Show the tax before the guest commits, as its own line, so the total doesn't change at checkout.
4. Collect it with the payment, usually with the balance, and keep it apart from your own income.
5. File and pay on schedule. Monthly, quarterly or yearly, depending on the authority.
6. Refund it with the stay. If you refund a cancelled booking, refund the tax too. You can't keep tax on a stay that never happened.

A worked example in US dollars

Say your property is in a county where the state, county and city occupancy taxes add up to 12%, and they apply to the nightly rate and the mandatory cleaning fee. (12% is an illustration. Use your own combined rate.)

If your local rules tax only the nightly rate, the tax is 12% of $720 = $86.40, and the total is $926.40. The difference looks small on one booking, but over a year it adds up, and tax offices check it.

When you file, you report the taxable amount ($840) and the tax collected ($100.80), not the total you received. If several authorities charge separate rates, split the $100.80 between them in proportion to their rates.

Keep records for every direct booking

For each direct stay, record:

• guest name, dates and number of nights;
• the taxable amount and each tax collected, by authority;
• the payment date and method;
• any refund and the tax refunded with it.

A simple spreadsheet is enough. It makes filing quick and protects you if an authority ever audits your returns.

Charging tax on OpenSty

OpenSty is a booking page for small hosts, and a good place to put this into practice. When you set a property's country to the US, Canada or the UK, you can charge occupancy tax as a percentage of the stay (on the nightly rate after discounts, with or without the cleaning and other fees) or as an amount per adult per night, and limit it to the first few nights where your tax has a cap, like Edinburgh's five. The booking form shows the tax as its own line before the guest sends a request, and the confirmation repeats it. You confirm each request yourself and guests pay you directly, following your payment instructions or by card through your own Stripe account, so there's no commission. Plans start at €14 a month, and checkout shows the price in your local currency where available. For the payment side, read taking payment for direct bookings in the US, Canada and UK.

Common questions

Do I have to charge occupancy tax on direct bookings?

In most places, yes. The tax applies to the stay, not to the booking channel. If a platform collects it for platform bookings, you still have to collect it yourself on direct ones.

Is the cleaning fee subject to occupancy tax?

Often, yes. Many states, counties and provinces tax every mandatory charge for the stay, including cleaning fees. Optional extras may be treated differently. Check your local definition of the taxable amount.

Do I need to charge GST/HST on a short-term rental in Canada?

Only if you're registered, which is required once your total taxable revenue goes over $30,000. Provincial and municipal accommodation taxes, such as BC's PST and MRDT or Quebec's 3.5% lodging tax, have their own rules and thresholds.

How does the Edinburgh visitor levy work for short-term lets?

It's 5% of the accommodation cost, charged for up to five consecutive nights, on stays from 24 July 2026 booked and paid for on or after 1 October 2025. The host collects it and files quarterly returns.

What happens to the tax if the guest cancels?

If you refund the stay, refund the tax with it and leave it out of your return. If you keep a cancellation fee, ask your tax office whether tax applies to it, because rules differ.