Indiana Short-Term Rental Laws (2026)

Indiana short-term rental compliance combines a state statute that limits some local restrictions with local permitting, zoning, safety, and tax rules. The state does not provide a single license that authorizes operation at every address.

This 2026 guide uses current Indiana Code, Indiana Department of Revenue, Indianapolis, and Bloomington sources. Verify the exact property address with the responsible city, town, county, and tax agencies before accepting bookings.

Quick Answer

Indiana Code Chapter 36-1-24 governs many rentals offered for less than 30 days through a short-term rental platform.
A local government may require one permit per property. State law caps the fee at $150 for an initial permit or a permit after revocation and prohibits a renewal fee.
A primary-residence short-term rental generally must be treated as a permitted residential use, subject to statutory exceptions. A non-primary-residence rental may face a special exception, special use, or variance process.
Indiana sales tax generally applies to accommodations furnished for less than 30 consecutive days at 7%.
County innkeeper's tax may also apply. Rates and collection procedures vary by county.
Indianapolis requires an annual permit for each short-term rental unit. Bloomington separately regulates residential rental occupancy.

Indiana's State Short-Term Rental Law

Indiana Code Chapter 36-1-24 defines and regulates short-term rentals. Its definition is tied to a dwelling rented for less than 30 days at a time through a short-term rental platform. Hosts should not assume that every furnished rental is treated identically - the booking method, property use, and local ordinance can matter.

The statute does not create a statewide operating license. Instead, it limits how local governments may regulate covered rentals. Important rules include:

A primary residence used as a short-term rental is generally a permitted residential use.
A local government may require a special exception, special use, or variance for a short-term rental that is not the owner's primary residence.
A local government may require one permit for each property.
A permit expires one year after issuance.
The fee may not exceed $150 for an initial permit or a permit issued after revocation. A local government may not charge a renewal fee.
Local rules may address fire and building safety, sanitation, traffic, parking, noise, and other subjects authorized by the statute.
Ordinances adopted before January 1, 2018, may fall under a statutory exception.

These qualifications matter. It is inaccurate to say that Indiana prevents every local prohibition in every circumstance. Review the current ordinance and zoning treatment for the specific property.

State Sales Tax on Accommodations

Indiana imposes a 7% sales tax on taxable accommodations furnished for less than 30 consecutive days. The Indiana Department of Revenue's Sales Tax Information Bulletin 41 covers hotels, apartments, houses, condominiums, vacation homes, cabins, cottages, and other transient accommodations.

A stay of 30 consecutive days or more is generally not subject to the accommodations sales tax. The bulletin also describes a narrow casual-renter exemption for certain primary residences rented fewer than 15 days, subject to federal-tax and marketplace conditions. Do not claim that exemption without confirming every requirement.

Who Collects the State Tax?

A marketplace facilitator that meets Indiana's requirements must collect and remit sales tax on facilitated transactions. For direct bookings, the owner or operator may need to register with the Department of Revenue, collect the tax, file returns, and remit payment. Review each booking channel separately rather than assuming a platform handles every obligation.

County Innkeeper's Tax

County innkeeper's tax is separate from state sales tax. Indiana DOR's County Innkeeper's Tax page lists current rates, effective dates, and whether the state or county collects the tax.

The tax generally applies to accommodations rented for less than 30 days in a county that has adopted it. Covered accommodations can include houses, apartments, condominiums, vacation homes, cabins, and cottages. Marketplace facilitators must collect applicable county innkeeper's tax on facilitated transactions. A homeowner taking direct bookings generally remains responsible unless a specific exemption applies.

Marion County's current innkeeper's-tax rate is 10%, in addition to the 7% state sales tax. Do not apply that 17% combined figure to properties outside Marion County - county rates differ.

Indianapolis Short-Term Rental Permit

Indianapolis-Marion County's annual permit program took effect January 1, 2025. Chapter 852 requires a separate permit for each short-term rental unit through the Department of Business and Neighborhood Services.

The permit expires one year after issuance and must be renewed.
The $150 fee applies to an initial permit or a permit following revocation. State law prohibits a renewal fee.
The rental must be a legally constructed dwelling unit.
RVs, travel trailers, mobile homes, automobiles, shipping containers, and similar structures not built for permanent occupancy do not qualify.
An inspection may be required to verify building-code, safety, and habitability compliance.
Short-term rentals do not require development-plan approval under Chapter 852, but other zoning and building rules still apply.

Use the city's Landlord and Short-Term Rental Registries page and the current Indianapolis Code Chapter 852 for the application and current requirements.

Indianapolis Chapter 852 and the city's short-term rental permit materials do not list a two-night minimum stay for the permit program. Hosts should confirm any separate booking-length rules, lease restrictions, or platform settings before listing.

Bloomington Rental Occupancy Rules

Bloomington operates a residential rental inspection and occupancy program. A property offered as a short-term rental may still need a rental occupancy permit and must comply with the occupancy load stated on the permit, zoning, and property-maintenance requirements.

Use Bloomington's official Residential Rental and Lodging Establishment Inspection Program to confirm the current application, inspection, fee, and occupancy requirements. Do not rely on an older $100 fee quoted by a third-party summary - fees and classifications must be checked with the city.

Other Indiana Cities and Counties

Requirements in Fort Wayne, Evansville, South Bend, smaller cities, towns, and unincorporated counties cannot be inferred from Indianapolis or Bloomington. Some locations use a specific short-term rental permit, while others rely on zoning approvals, general rental registration, building rules, nuisance codes, or county tax registration.

Before operating, request written confirmation from the local planning or zoning office on:

Whether the use is allowed at the parcel.
Whether the property is treated as a primary residence or non-primary residence.
Whether a permit, special exception, special use, variance, business registration, or rental occupancy permit is required.
Maximum occupancy, parking, noise, and local-contact rules.
Building, fire, sanitation, and inspection requirements.
Advertising and permit-number display rules.
Applicable county innkeeper's tax and the correct collection agency.

Insurance and Safety

Indiana's statewide short-term rental chapter does not create one universal insurance limit for every host. Local permit rules, lenders, homeowners associations, and insurers may impose additional requirements. Standard homeowners coverage may exclude or limit business rental activity, so obtain written confirmation that the policy covers the actual use.

Regardless of permit language, maintain working smoke and carbon-monoxide alarms, safe exits, compliant electrical and heating systems, visible emergency information, and occupancy controls. Follow any stricter local inspection or building-code requirement.

2026 Compliance Checklist

Classify the rental. Confirm that the property and booking arrangement fall within Indiana's short-term rental rules.
Confirm primary-residence status. This affects the local zoning authority available under state law.
Check pre-2018 rules. An older local ordinance may be treated differently under IC 36-1-24.
Verify zoning. Obtain address-specific confirmation before purchasing, converting, or advertising the property.
Complete local permits. Apply for every required short-term rental, rental occupancy, business, zoning, or safety approval.
Map taxes by channel. Confirm 7% state sales tax, county innkeeper's tax, exemptions, and who collects each tax for platform and direct bookings.
Prepare the property. Meet building, fire, sanitation, occupancy, parking, and local-contact requirements.
Track annual deadlines. Indiana permits may expire after one year even when no renewal fee is allowed.
Keep records. Retain permits, tax returns, platform statements, direct-booking receipts, inspections, insurance confirmations, and local correspondence.

Common Mistakes

Treating Indiana's law as an absolute ban on all local restrictions.
Assuming a primary-residence rule also protects a non-primary-residence investment property.
Using Marion County's 10% innkeeper's-tax rate for another county.
Assuming a platform remits taxes on direct bookings.
Paying a local renewal fee without checking the state-law prohibition.
Relying on stale local permit fees or proposed ordinances.
Listing before zoning and permit approval are confirmed.

Official Sources

Bottom Line

Indiana offers meaningful state protections for covered short-term rentals, but those protections are qualified. Confirm primary-residence status, pre-2018 local rules, zoning, annual permits, safety requirements, and taxes for the exact address. This guide is general information, not legal or tax advice.