Owning Vacation Rental Advice

I don't know if you'd have to charge IVU (sales tax) The easiest way to find this out is setting up a DBA. (your PR bank can help you).
As soon as you have your DBA registered  one of the first letters you'll receive is from Hacienda (the PR IRS) about IVU. They inform you if you have to charge it and how to handle things.

There may be an extra  municipal tax for tourists that you will have to charge your renters - check at the town hall.

Thanks Gary.  We'll check when we open our bank account. 

Is anyone here on the forum doing vacation rentals?

If you have income from the mainland, I believe you'll have to file a Federal return and you can file a Schedule E for rental properties.  I believe you'll also, have to file a PR tax return for the income from PR.  I don't think that you would have to set up a DBA or business.  We currently own rental property here in Illinois.  I'm curious about the tourist tax, too, as when we come to PR and rent from an owner, they've not charged us taxes.

Thanks for the input Schuttzie.  We've had the same experience when we've rented on the island with some people not charging us tax but I prefer to do things the proper way.  I'm just having trouble finding out exactly what we're supposed to do!

dafa wrote:

... some people not charging us tax ...

To say it's common practice would be too much but many businesses didn't charge sales tax and some still don't.
To "encourage" business to charge sales tax the PR IRS (Hacienda) started a sales tax lottery (IVU Loto). On every receipt from any business you should have a number for this lottery and some nice amounts of $$ are awarded to winners (From 25 Grand down to $500) and the idea is that people report businesses that don't participate.

There's a substantial grey economy here on the island and I wouldn't be surprised to hear that vacation rentals is part of it.

I can't tell you anything about the legalities of vacation rentals, but my family frequently rents in the Rincon area. Sometimes we just use vrbo.com or another owner website like that. Other times we've gone through Island West Properties - a real estate agency in Rincon that manages rental properties for owners (as well as selling properties). http://www.island-west.com/
Maybe you could contact them with an inquiry about their services and get info about the taxes, etc. during the conversation without committing to anything.

Thanks - that's a good suggestion.

You may want to check out this website:  http://www.seepuertorico.com/en/roomtax/

Thanks - that's the info I was looking for!

I have a vacation rental in Aguadilla.  I started taxing this year.  If you have any questions, just let me know.  Best of Luck!
Liz