Connecticut Short-Term Rental Tax Overview
Connecticut imposes state income tax at rates up to 6.99% on net rental income, combined with Room Occupancy Tax at 15% on gross rental receipts. 15% statewide room occupancy tax on lodging under 30 days (one of the highest in the U.S.). The total tax burden for Airbnb hosts in Connecticut varies by location, ranging from approximately 15% in Hartford to 15% in New London. Understanding the layered structure of federal, state, and local taxes is essential for compliance and accurate pricing.
This guide covers the 2026 tax year. Tax rates and rules change frequently — always verify current rates with the Connecticut Department of Revenue Services and consult a qualified tax professional for advice specific to your situation. Federal tax obligations (Schedule E, Form 1099-K, the 14-day rule) apply in addition to all state and local taxes described below. See IRS Publication 527 for federal rental income rules.
Income Tax on Rental Income
Rate: 6.99%
Graduated rates from 3% to 6.99%; also imposes a 15% surcharge on tax liability over certain thresholds
- Net STR income (after expenses) reported on the Connecticut state income tax return
- Federal Schedule E (or Schedule C if substantial services provided) is required regardless of state tax
- The 14-day rule: if you rent your primary residence 14 days or fewer per year, federal rental income is tax-free (IRS Publication 527)
- Self-employment tax may apply if you provide hotel-like services (daily cleaning, meals, concierge)
Room Occupancy Tax
Rate: 15%
15% statewide room occupancy tax on lodging under 30 days (one of the highest in the U.S.)
What Airbnb Collects Automatically
- State room occupancy tax (15%)
What Hosts Must Collect and Remit
- No additional local taxes in most cases — Connecticut's tax is entirely state-level
Local Tax Rates by City in Connecticut
Combined estimated occupancy/lodging tax rates including state + local components (income tax not included):
| City / Area | Local Tax Rate | Combined Rate | Registration Required? |
|---|---|---|---|
| Hartford | 15% | 15% | State permit only |
| New Haven | 15% | 15% | State permit only |
| Stamford | 15% | 15% | State permit only |
| Bridgeport | 15% | 15% | State permit only |
| Mystic | 15% | 15% | State permit only |
| New London | 15% | 15% | State permit only |
Deductions for Connecticut Airbnb Hosts
Connecticut generally conforms to federal depreciation and deduction rules for rental income. However, Connecticut does not allow bonus depreciation — hosts must add back any federal bonus depreciation and use standard 27.5-year MACRS on the state return. Connecticut also requires an addback of the federal SALT deduction cap amount. The 6.99% top rate plus the 15% occupancy tax makes Connecticut one of the highest overall tax burden states for STR operators.
Common Deductible Expenses
- Depreciation — Building cost over 27.5 years (IRS Publication 946); often the largest single deduction
- Mortgage interest — Deductible in proportion to rental use percentage
- Property taxes — Proportional to rental use days vs. personal use days
- Insurance — STR-specific or landlord insurance premiums
- Cleaning and maintenance — All turnover cleaning fees, repairs, and upkeep
- Supplies — Linens, toiletries, coffee, kitchen supplies for guests
- Platform fees — Airbnb host service fees (typically 3%) are fully deductible
- Utilities — Electricity, internet, water, gas proportional to rental use
- Professional fees — CPA, tax preparer, attorney fees related to the rental business
Filing Requirements and Deadlines
Registration
Required: Sales and Use Tax Permit
Cost: Free
Register at: Connecticut Department of Revenue Services
Filing Schedule
Monthly or quarterly for room occupancy tax; annually for income tax
Key Resources
Common Connecticut Tax Mistakes for Airbnb Hosts
Mistake #1
Not realizing Connecticut's 15% room occupancy tax is among the highest in the nation — hosts who previously operated in lower-tax states may underestimate the Connecticut burden and under-price their listings.
Mistake #2
Confusing the room occupancy tax with sales tax — they are separate taxes in Connecticut, though both are administered by DRS. The 15% room occupancy tax applies specifically to lodging.
Mistake #3
Not registering even though Airbnb collects the tax — Connecticut still requires hosts to obtain a Sales and Use Tax Permit from DRS regardless of whether Airbnb collects the room occupancy tax on their behalf.
Connecticut Short-Term Rental Regulations Beyond Tax
Connecticut does not have statewide STR-specific regulations beyond tax requirements. Local zoning laws apply, and some municipalities have begun considering STR ordinances. The state's 15% room occupancy tax was extended to cover STRs (including Airbnb) in 2019, bringing them into parity with hotels. Connecticut requires all STR operators to register with the Department of Revenue Services and obtain a permit. There are no statewide night caps or primary residence requirements.
Calculate Your Connecticut Airbnb Tax
Enter your income, expenses, and select Connecticut to get an instant federal + state estimate.
Frequently Asked Questions
Does Connecticut tax Airbnb income?
Yes, significantly. Connecticut imposes a 15% room occupancy tax on gross rental receipts (one of the highest rates in the U.S.) plus state income tax of 3-6.99% on net rental profit. The 15% occupancy tax alone can substantially affect your pricing strategy and profitability. All net rental income must also be reported on your Connecticut income tax return (Form CT-1040). See Connecticut DRS and IRS Publication 527.
Does Airbnb collect Connecticut room occupancy tax?
Yes. Airbnb collects and remits the 15% Connecticut room occupancy tax automatically through its agreement with the state. Because Connecticut's tax system is entirely state-level (no separate city/county lodging taxes), Airbnb's collection covers the full occupancy tax obligation in most cases. However, hosts still must register with DRS and obtain a Sales and Use Tax Permit.
Why is Connecticut's Airbnb tax so high?
Connecticut's 15% room occupancy tax was designed to achieve parity between STRs and traditional hotels, which had long been subject to the same rate. The rate reflects Connecticut's broader high-tax philosophy and its reliance on consumption taxes. The 15% applies to gross receipts before any expenses, making it a significant cost for hosts. Some hosts offset this by adjusting their nightly rates upward, while others accept lower margins.
What deductions do Connecticut Airbnb hosts get?
Connecticut follows federal rules for most rental deductions: mortgage interest, property taxes (proportional to rental use), depreciation (27.5-year MACRS only — no bonus depreciation), insurance, cleaning, supplies, utilities, and platform fees. The key state-specific difference is that Connecticut does not conform to bonus depreciation, so you must adjust your depreciation on the state return. At the 6.99% top state rate, each $1,000 in deductions saves about $70 in state tax.
Do I need a permit to Airbnb in Connecticut?
Yes. All STR operators must register with the Connecticut Department of Revenue Services and obtain a Sales and Use Tax Permit (free). This is required even though Airbnb collects the room occupancy tax automatically. You do not need a separate STR-specific license at the state level, but check your local municipality for zoning compliance and any local registration requirements.