The US Virgin Islands short-term rental license and room tax
Renting a villa by the week in the US Virgin Islands takes a short-term rental license from the Department of Licensing and Consumer Affairs and a room tax account with the Bureau of Internal Revenue. The catch is the rhythm: a tax return every month, guests or not, and a license the department can end if the taxes fall behind.
| The license | A DLCA business license, Short Term Rental A or B A for a home that sleeps five or more, $260 a year; B for up to four, $195 a year, as the Department of Licensing and Consumer Affairs announced the classes in July 2021. Check the current fee in its online portal. |
|---|---|
| Before DLCA issues it | A BIR tax clearance letter, a police records check, DPNR zoning approval Plus a Fire Service inspection for some businesses and a trade name certificate from the Lieutenant Governor's office if you trade under a name (DLCA steps page, read 2026-10-21). |
| Room tax | 12.5% of the gross room rate, stays under 90 days The rate includes charges such as an energy surcharge or a maintenance fee, and excludes food, beverages and gratuities (BIR Form 722 VI instructions, read 2026-10-21). |
| Room tax return | Form 722 VI, monthly, by the 30th day after the month Filed every month, with NONE entered when nothing is due (Bureau of Internal Revenue, read 2026-10-21). |
| Gross receipts tax | 5% of receipts over $9,000 a month, under $225,000 a year 5% of all receipts at $225,000 or more, filed monthly on Form 720 V.I.; below that, one annual Form 720-B by January 30 (BIR Tax Structure Booklet, read 2026-10-21). |
| Airbnb bookings | Airbnb collects and remits the 12.5% itself Under an agreement with the territory of June 1, 2017, per DLCA's notice of July 2021. Every other channel, and every direct booking, is yours to collect and file. |
| Owner off island | IRS Form 8689 with the federal return For US citizens and resident aliens who are not bona fide USVI residents and have USVI-source income (Internal Revenue Service, page reviewed April 29, 2026). Ask a preparer who files in both places. |
Do you need a USVI short-term rental license?
Yes. Since July 1, 2021, the Department of Licensing and Consumer Affairs, DLCA, has issued a business license for a short-term rental: accommodation for less than 90 days in a private home, a condominium or a villa. Hotels, motels and bed and breakfasts have licenses of their own. There are two classes, set by how many the home sleeps. Short Term Rental A covers five or more guests and Short Term Rental B up to four; DLCA put them at $260 and $195 a year when it announced them, the latest figures it has published as of October 2026. An owner who held an apartment rental license could convert at renewal.
You apply and renew in DLCA's online licensing portal, and anyone can look a license up in its public search. That second point matters more than it sounds. A guest, a homeowners' association or a neighbor can check yours, and DLCA's 2021 notice said the license helps associations whose bylaws allow long-term rentals and forbid short ones. Read your association's rules before you apply.
What DLCA asks for before the license is issued
DLCA's own checklist is shorter than most owners expect, and most of it comes from other agencies.
| Item | Who | What it is |
|---|---|---|
| 1 | Bureau of Internal Revenue | A tax clearance letter, which means a BIR account in good standing |
| 2 | Lieutenant Governor's office | A trade name or corporation certificate, if you rent through a company or under a name |
| 3 | Virgin Islands Police Department | A records check, submitted by DLCA |
| 4 | Department of Planning and Natural Resources | Zoning approval, submitted by DLCA |
| 5 | Virgin Islands Fire Service | An inspection, where the Fire Service says the business needs one |
| 6 | DLCA | The license, applied for and renewed in the online portal |
DLCA's steps page, read on October 21, 2026, lists these. It says a renewal is issued without a fresh clearance check, but that letting your tax standing slip may lead it to terminate the license. An owner who lives on the mainland needs someone on the island for the inspections and for the guests, by our read, whether that is a manager, a neighbor or a caretaker.
How the 12.5% hotel room tax works for a villa
The territory's hotel room tax is not only for hotels. BIR's return, Form 722 VI, counts as a guest anyone who rents an apartment, condominium, timeshare, villa or residence by the day, week or month for less than 90 days. The guest pays 12.5% of the gross room rate, and the owner collects it, shows it on the bill as its own line and sends it to BIR.
The gross room rate is broader than the nightly rate. In BIR's words it is the total charged for the rooms plus any additional charges such as an energy surcharge or a maintenance fee; food, beverages and gratuities are left out. A cleaning fee is not named either way on the form, so ask BIR how to treat yours before the first return rather than after.
The return is monthly and is due by the 30th day after the month ends, with the tax. It asks which kind of property you rent, villa or condo among the boxes, the room nights, and the rent. A month with no guests is still a return: you enter NONE and file it. The form carries lines for penalty and interest, which is the reason to keep to the calendar even in September. A $25-a-night environmental and infrastructure fee that BIR also collects applies to timeshares, not to a villa.
What a guest pays on a villa week in tax
One week at $850 a night is $5,950 in rent. The room tax at 12.5% is $743.75, so the guest's bill is $6,693.75 before any other charge, and an energy surcharge on that bill is taxed too.
| Line | Amount |
|---|---|
| 7 nights at $850 | $5,950.00 |
| Hotel room tax, 12.5% | $743.75 |
| The guest pays | $6,693.75 |
Quote the tax up front, as its own line. Guests from the mainland rarely expect a hotel tax on a house, and the honest inquiry reply names it before the dates are agreed on.
Does Airbnb collect the room tax for you?
On its own bookings, yes. Airbnb has collected the 12.5% and paid it to BIR under an agreement with the territory since June 1, 2017, as DLCA put it in its notice of July 2021, which also said that everyone else relies on the honor system. We found no government statement of any other channel doing the same, as of October 2026.
So the line runs by booking, not by house. A week booked through Airbnb is taxed by Airbnb; a week booked anywhere else, or directly with you, is yours to collect and report on Form 722 VI. Owners who use several channels keep one ledger with the channel beside each stay, so the monthly return never counts a week twice. Ask BIR how it wants the remitted weeks shown.
Gross receipts tax and income tax on the rent
The rent is also business income. BIR's Tax Structure Booklet sets the gross receipts tax at 5%. A business taking less than $225,000 a year pays it only on receipts over $9,000 in a month, and an exemption unused in one month is lost; it files one Form 720-B a year, by January 30. At $225,000 or more the tax is on everything, filed monthly on Form 720 V.I. Businesses owned by the same taxpayer or by members of a family share a single exemption, so two villas in one family are counted together.
Income tax follows the US code, which the territory mirrors. An owner who is not a resident of the islands and has rental income here figures the share of US tax allocable to the territory on Internal Revenue Service Form 8689. This is the point to hire a preparer who files in both places.
Insurance and hurricane season for a rental villa
Hurricane season runs from June through November, and a villa that rents in those months carries two risks a mainland house does not: the storm itself and the canceled weeks around it. By our read, the questions to settle before the season are the windstorm deductible on the policy, whether it covers a house that is rented by the week, and what your written terms say a guest gets back when a named storm closes the airport. The hurricane season guide has the months that matter and the cancellation terms owners here use.
What a property manager does, and the questions to ask
Most off-island owners hire someone, and the work is the same whoever does it: meeting guests, cleaning and laundry between stays, a call when the cistern runs low, the inspections DLCA needs, and often the monthly room tax return. No government publishes what a manager charges, and terms vary. The question to ask in writing is who files Form 722 VI and the gross receipts return, because the license is yours whoever sends the money.
Where listing your villa here fits
A listing here is one flat fee a year, set by the villa's nightly rate, and never a percentage of a booking. The guest writes to you, you agree on the dates, and they pay you, so a guest who finds you here books with you directly: you collect the 12.5% and report it, as above. Have the license number and the BIR account open before the first guest, then start your listing.
Questions about the US Virgin Islands
Do I need a license to rent my villa short-term in the USVI?
Yes. A stay of less than 90 days in a private home, condominium or villa needs a business license from the Department of Licensing and Consumer Affairs: Short Term Rental A for five or more guests, $260 a year, or B for up to four, $195, as DLCA set them in July 2021. DLCA asks first for a BIR tax clearance letter.
Who collects the 12.5% hotel tax, and do I file monthly?
The owner or manager collects it from the guest and files Form 722 VI with the Bureau of Internal Revenue every month, by the 30th day after the month ends, as of October 2026. A month with no stays is filed as NONE. On bookings made through Airbnb, Airbnb collects and remits the tax itself.
What is the hotel tax in the US Virgin Islands?
12.5% of the gross room rate for any stay of less than 90 days, in a hotel, a condominium or a villa, per the Bureau of Internal Revenue as of October 2026. The rate includes charges such as an energy surcharge and excludes food, beverages and gratuities. On a week at $850 a night it is $743.75.
Do I still collect the room tax if Airbnb already does?
Only on the weeks Airbnb did not book. Airbnb remits the 12.5% on its own bookings under its 2017 agreement with the territory; every week booked through another channel or directly with you is yours to collect and report on Form 722 VI. Keep the channel beside each stay so no week is counted twice.
Facts checked against the Bureau of Internal Revenue, the Department of Licensing and Consumer Affairs and the Internal Revenue Service. Checked October 2026.