Island County, WA Short-Term Rentals: Taxes & Fees (2026)
Key Facts
- Additional STR tax rate
- 2% (Sec 3.06A.010)
- Combined tax cap
- 12% total (Sec 3.06A.030)
- Taxable booking length
- Under 1 continuous month
- Collecting agency
- WA Dept. of Revenue
- Penalty
- Up to $1,000 fine / 90 days jail
- Revenue fund
- Joint Tourism Promotion Fund
Summary
Short-term stays booked in unincorporated Island County, including vacation rentals treated as a license to use real property for under one month, owe an additional 2 percent lodging excise tax under Code Chapter 3.06A, on top of the county's base 2 percent tax, collected by the Washington Department of Revenue and capped by state law.
Pursuant to RCW 67.28.181, there is hereby levied a special excise tax of two (2) percent on the sale of or charge made for the furnishing of lodging that is subject to tax under Chapter 82.08 RCW. The tax imposed under Chapter 82.08 RCW applies to the sale of or charge made for the furnishing of lodging by a hotel, rooming house, tourist court, motel, or trailer camp, and the granting of any similar license to use real property, as distinguished from the renting or leasing of real property. It shall be presumed that the occupancy of real property for a continuous period of one (1) month or more constitutes a rental or lease of real property and not a mere license to use or enjoy the same. ... Every person convicted of a violation of any provision of this chapter shall be punished by a fine in a sum not to exceed one thousand dollars ($1,000.00) or by imprisonment for a term not to exceed ninety (90) days or by both such fine and imprisonment. Each day of violation shall be considered a separate offense.
Full Breakdown
Chapter 3.06A of the Island County Code, adopted for tourism promotion, levies an additional special excise tax of 2 percent on the sale of or charge for furnishing lodging that is subject to tax under Chapter 82.08 RCW, including stays at a hotel, rooming house, tourist court, motel or trailer camp, and any similar license to use real property, in unincorporated Island County (§ 3.06A.010). As with the county's base lodging tax, the code presumes a continuous occupancy of one month or more is a rental or lease rather than a taxable license, so the tax reaches short-term bookings, the category most vacation and short-term rental stays fall into.
This additional tax stacks on top of the base 2 percent tax levied under Chapter 3.06, but § 3.06A.030 caps the combined rate: the tax under § 3.06A.010 cannot exceed the lesser of 2 percent or whatever rate, added to all other state and local lodging taxes under Chapters 67.28, 36.100, 67.40, 82.08 and 82.14 RCW, would push the total past 12 percent. The Washington State Department of Revenue is designated as the county's collection agent, applying the same forms, rules and administrative provisions it uses for the state sales tax under RCW 82.08.050 through .060 and Chapter 82.32 RCW (§ 3.06A.060).
Proceeds are deposited into the Special Island County/Cities Joint Tourism Promotion Fund for tourism-related facilities and promotion (§ 3.06A.040). Operators inside Oak Harbor, Coupeville or Langley remit under those cities' own lodging tax codes; this chapter governs only unincorporated Island County short-term rentals.
Violations & Fines
Section 3.06A.070 makes it unlawful to violate or fail to comply with any provision of the additional lodging tax chapter. A conviction is punishable by a fine of up to $1,000, imprisonment for up to 90 days, or both, and each day a short-term rental operator remains out of compliance, such as by failing to remit the tax, counts as a separate offense.
Frequently Asked Questions
Does Island County tax short-term rental bookings separately from hotels?
Is there a cap on how much lodging tax can be stacked on a short-term rental?
What happens if a short-term rental host doesn't remit the tax?
Where does the extra 2 percent short-term rental tax money go?
Sources & Official References
Other rules in Island County
Compare Island County to another location·View the Washington short-term rentals overview
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