How to set up an LLC for an Airbnb

What the LLC does, and what it doesn't

• The LLC can own the property and sign the platform account, the bank account and the guest contracts in its own name.
• It doesn't replace the city's permit or registration, the city's occupancy tax, or your insurance. Each city guide below covers those.
• How far an LLC shields you is set by your state's LLC act and by how you run it. For one LLC versus one per property, see Should you have a separate LLC for each rental property?

Set it up in this order

1. Read your city's rules. Find out whether an LLC can hold the permit, whether a host must live there, and whether a change of ownership ends a permit you already hold. The list below covers the cities Corpus has written up; all city guides are here.
2. Form the LLC in the state where the property is. Your state's rental property LLC guide covers forming there versus registering there, and the state's fees.
3. Get an EIN for the LLC from the IRS.
4. Check the mortgage before you move the deed. A deed to your LLC can trigger a mortgage's due-on-sale clause, and an LLC transfer is not one of the transfers the federal statute expressly protects for homes with fewer than five dwelling units (12 U.S.C. § 1701j-3). Ask your servicer for written confirmation first.
5. Move the deed and tell your insurer before title moves. The state guide covers the deed form and any transfer tax.
6. Put the city permit, the platform listing and the tax accounts in the right name. If your city voids a permit on a transfer, apply again before you take new bookings.

Who can hold the permit: what city codes say

A natural person, not an LLC

• New York City: the applicant must be "a natural person who is a permanent occupant" (NYC Admin. Code § 26-3102(c)(1)). NYC guide
• San Diego: only a host, defined as a natural person, may apply (San Diego Municipal Code § 510.0102). San Diego guide
• St. Louis: the permit goes only to a natural person (St. Louis Revised Code § 25.57.030(G)). St. Louis guide
• Kansas City: the registrant must be a natural person, and if an LLC owns the unit you give its managing or administrative member (Kansas City Code § 56-803(2)(c)). Kansas City guide
• Chicago: a shared housing host must be a natural person (Municipal Code of Chicago § 4-14-020(b)). Chicago guide
• Boston: the operator is a "natural person who is the owner of the residential unit" (Boston Municipal Code § 9-14.2). Boston guide
• Los Angeles: a Home-Sharing Host is defined as an individual (Los Angeles Municipal Code § 12.22 A.32(b)(6)). Los Angeles guide

An LLC can be the owner, with conditions

• Long Beach: "host" includes "a limited liability company and the members of such company" (Long Beach Municipal Code § 5.77.020(F)). Long Beach guide
• Cleveland: an owner can be "the individual or entity that owns a property operating as a short-term rental" (Codified Ordinances of Cleveland § 686B.02(i)). Cleveland guide
• Dallas: an entity owner names an agent for legal notices and each manager or member who runs it (Dallas City Code § 42B-6). Dallas guide
• Columbus: an entity applicant gives its name as on its articles, a statutory agent and its entity number (Columbus City Codes § 598.03(B)(1)). Columbus guide
• Jersey City: an entity lists its partners, officers and directors with its certificate of formation and operating agreement, and a principal or member must live there (Jersey City Code § 255-3(A)(1), (14)). Jersey City guide
• Indianapolis: for an entity owner, an officer or agent makes the application (Indianapolis-Marion County Revised Code § 852-106(2)(b)). Indianapolis guide
• Peoria and Scottsdale: an entity owner gives its statutory agent (Peoria City Code § 11-150(2)(b); Scottsdale Revised Code § 18-154(a)(2)). Peoria guide · Scottsdale guide
• St. Paul: the application lists all corporate officers and anyone with a 25 percent or greater beneficial interest (Saint Paul Legislative Code § 379.05(b)(4)). St. Paul guide
• Charleston: a single or dual member LLC may qualify as a resident owner if its members swear they are the sole members and each meets the residency tests (Charleston, S.C., Zoning Ordinance § 54-120). Charleston guide
• Chattanooga: a homestay applicant "must be a natural person or a business entity (i.e., a Tennessee LLC, corporation, partnership etc.)" that lives on the premises (Chattanooga City Code § 38-89(c)(2)(i)). Chattanooga guide

Entity ownership barred, or looked through

• New Orleans: for a non-commercial rental, "Ownership, in whole or in part, by a business entity, trust, or any other juridical person is prohibited" (New Orleans City Code § 26-617(a)(1)). New Orleans guide
• Austin: the site caps treat an LLC-owned unit as an individual's only when "each member is an individual" (Austin City Code § 4-23-31(E)). Austin guide
• Seattle: an LLC's members and managers count as principals under the one-license rule (Seattle Mun. Code § 6.600.030). Seattle guide
• Minneapolis: "all direct and indirect owners" of an LLC are treated as holding its interest in a rental license (Minneapolis Code of Ordinances § 244.1800). Minneapolis guide
• Oxnard: a home owned even in part by an LLC is ineligible unless every member is a natural person (Oxnard City Code § 16-663.4(B)). Oxnard guide

Moving the property into an LLC can end the permit

• Hollywood, Florida: if any ownership interest is transferred, the license is "null and void" and the new owner applies for its own (Hollywood, Fla., City Code § 119.17). Hollywood guide
• Columbus: a transfer in ownership of the dwelling voids the permit held in the owner's name (§ 598.03(G)).
• St. Paul: licenses aren't transferable, and a transfer includes one of interests in a legal entity (Saint Paul Legislative Code § 310.09(b), (c)).
• Sacramento: a permit may not be transferred (Sacramento City Code § 5.114.030). Sacramento guide
• Houston: the certificate is "null and void if the registrant sells or conveys any ownership or leasehold interest" (Houston Code of Ordinances § 28-736). Houston guide
• Clarksville: the permit "shall terminate immediately upon the transfer of the property covered by the permit, whether such transfer is by deed, by law, or otherwise" (Clarksville City Code § 5-307(b)). Clarksville guide
• Tulsa: a "new short-term rental license is required when the dwelling unit is sold or conveyed" (Tulsa Revised Ordinances tit. 21, § 2601(C)). Tulsa guide
• San Antonio, an exception: for a Type 2 rental that existed when the ordinance was adopted, a transfer to a legal entity controlled by the prior owner isn't a change in owner (San Antonio City Code § 16-1114). San Antonio guide

A city that requires a host who lives in the home still requires one after the deed moves. Forming an LLC doesn't change who must live there.

Taxes

The city's hotel or occupancy tax is in each city guide's Taxes section, and it applies whoever owns the property. For federal income tax, a single-member LLC is disregarded unless it elects to be taxed as a corporation (IRS).

Form your LLC with Corpus

Corpus forms LLCs in all 50 states and the District of Columbia, and your state's page shows the price and the state fee before you start. Pick the state where the rental is.

Short-term rental rules in your city

Seattle, WA · Long Beach, CA · San José, CA · Atlanta, GA · Denver, CO · Chicago, IL · Columbus, OH · Kansas City, MO · St. Louis, MO · New York City, NY · New Orleans, LA · Peoria, AZ · Hollywood, FL · Sacramento, CA · Austin, TX · Virginia Beach, VA · Jersey City, NJ · San Diego, CA · Dallas, TX · Cleveland, OH · Minneapolis, MN · Indianapolis, IN · Scottsdale, AZ · St. Paul, MN · Fort Worth, TX · Anaheim, CA · Arlington, TX · Columbia, SC · Charleston, SC · Columbus, GA · Memphis, TN · Richmond, VA · Boston, MA · San Antonio, TX · Ann Arbor, MI · Oklahoma City, OK · Clarksville, TN · Chattanooga, TN · Glendale, AZ · Fresno, CA · Los Angeles, CA · Oxnard, CA · Fort Lauderdale, FL · Wichita, KS · Lexington, KY · Akron, OH · Toledo, OH · Tulsa, OK · Corpus Christi, TX · Houston, TX · Salt Lake City, UT

All 51 city guides by state

Sources

• 12 U.S.C. § 1701j-3 (Corpus official text): https://corpuslaw.us/code/2fc8c7eb-0b53-4b5a-821a-477c5d2baf63
• NYC Admin. Code § 26-3102, Short-term rental registration (Corpus official text): https://corpuslaw.us/code/1c2d80bf-0280-4444-bc39-8dda877a8d55
• San Diego Municipal Code § 510.0102, Definitions (Corpus official text): https://corpuslaw.us/code/d82d7ac1-dc02-42cc-a15d-b8a587af5663
• St. Louis Revised Code § 25.57.030, Definitions and General Provisions (Corpus official text): https://corpuslaw.us/code/bd0d693b-cd00-47ba-8105-0fe02a9c821e
• Kansas City Code § 56-803, Annual Short-Term Rental Registration (Corpus official text): https://corpuslaw.us/code/a24eb4a0-e8ee-4f11-bbd2-dfdcdc462748
• Municipal Code of Chicago § 4-14-020, Shared Housing Unit Registration (Corpus official text): https://corpuslaw.us/code/11851531-31d3-43d7-bd5b-c2892055aa54
• Long Beach Municipal Code § 5.77.020, Definitions (Corpus official text): https://corpuslaw.us/code/cb04f0ae-2698-4c1e-b222-5d58617e05f3
• Codified Ordinances of Cleveland § 686B.02, Definitions (Corpus official text): https://corpuslaw.us/code/1885f40a-25ab-4825-be67-de356992abc0
• Dallas City Code § 42B-6, Short-Term Rental Registration Application (Corpus official text): https://corpuslaw.us/code/ae87cc98-59a9-45bc-91e7-aedf9368f64f
• Columbus City Codes § 598.03, Application for Hotel/Motel or Short-Term Rental Permit (Corpus official text): https://corpuslaw.us/code/fd7c662d-e1ba-4e16-9489-c69ab1172d2f
• Jersey City Code § 255-3, Short-Term Rental Requirements (Corpus official text): https://corpuslaw.us/code/ca072622-db19-4a96-ac90-0b95db4e8128
• Indianapolis-Marion County Revised Code § 852-106, Short-Term Rental Permit Program (Corpus official text): https://corpuslaw.us/code/77184c4a-e012-4ed3-aeb2-0ff6435c8932
• Peoria, Ariz., City Code § 11-150, Short Term Rentals and Vacation Rentals (Corpus official text): https://corpuslaw.us/code/984ac8d8-9291-4e0e-8c83-ce8d4202d5a6
• Scottsdale Revised Code § 18-154, Application for License (Corpus official text): https://corpuslaw.us/code/919b9ec8-3d25-41aa-ac29-2c853f6fa945
• Saint Paul Legislative Code § 379.05, License Applications (Corpus official text): https://corpuslaw.us/code/682d3275-483c-44b9-8d73-b3994820cf3b
• Saint Paul Legislative Code § 310.09, Transfers; General (Corpus official text): https://corpuslaw.us/code/a2688857-5986-4dc0-990f-396a51435a11
• New Orleans City Code § 26-617, Permit and Application, Eligibility (Corpus official text): https://corpuslaw.us/code/65f86927-3d68-4edc-9ed6-2185cb866872
• Austin City Code § 4-23-31, Eligibility to Operate a Short-Term Rental (Corpus official text): https://corpuslaw.us/code/6040a646-f91f-4333-83fd-46338094ce7a
• Seattle Mun. Code § 6.600.030, Definitions (Corpus official text): https://corpuslaw.us/code/df744716-f59d-4414-a17f-898d201d9543
• Minneapolis Code of Ordinances § 244.1800, Definitions (Corpus official text): https://corpuslaw.us/code/12c552d7-9849-48c0-af8c-b66c2a2e8689
• Hollywood, Fla., City Code § 119.17, License Non-Transferable, Non-Assignable (Corpus official text): https://corpuslaw.us/code/045374c0-e683-431f-ac1b-2450c11a3b0e
• Sacramento City Code § 5.114.030, Permits Not Transferable (Corpus official text): https://corpuslaw.us/code/6b01a607-cc25-4fff-8cb4-403fb7face2e
• Boston Municipal Code § 9-14.2, Definitions (Corpus official text): https://corpuslaw.us/code/ac536d1e-b659-4e0e-9417-674dbb881f5e
• Los Angeles Municipal Code § 12.22, Exceptions (Corpus official text): https://corpuslaw.us/code/ae9e776b-73db-4e1d-b73b-99be5ef32aa0
• Charleston, S.C., Zoning Ordinance § 54-120, Definitions (Corpus official text): https://corpuslaw.us/code/992c3368-d0f6-49f4-ac9e-e99f7fc199b8
• Chattanooga City Code § 38-89, Certificate Application; Action; Approval or Denial; Appeals (Corpus official text): https://corpuslaw.us/code/c1cd0cc6-f4df-4840-ac99-18b88ff56f27
• Oxnard City Code § 16-663.4, Ineligible Dwellings, Structures and Spaces (Corpus official text): https://corpuslaw.us/code/85cbab55-9ae9-4e71-8a19-2176146ae58d
• Houston Code of Ordinances § 28-736, Certificate of Registration Not Transferrable (Corpus official text): https://corpuslaw.us/code/7c1aa3b6-9c60-4652-8bfd-713e2c33174e
• Clarksville City Code § 5-307, Prohibition Against Transfer (Corpus official text): https://corpuslaw.us/code/ae2131e3-9d16-40a2-ba76-9c57c71d261a
• Tulsa Revised Ordinances tit. 21, § 2601, License Required (Corpus official text): https://corpuslaw.us/code/98f1e665-dd32-440f-bc91-ed6e72e870b8
• San Antonio City Code § 16-1114, Nonconforming Rights (Corpus official text): https://corpuslaw.us/code/59829eff-43b7-4152-9476-f0fb087be88e
• IRS, single-member limited liability companies: https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies
• IRS, get an employer identification number: https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number