Navigating Wisconsin's regulatory landscape presents unique challenges due to its localized approach to short-term rental oversight. With minimal statewide regulation beyond statutory authorization for local control, Wisconsin grants municipalities, villages, and towns the authority to regulate short-term rentals through local ordinances, creating a patchwork of requirements that vary significantly across jurisdictions.
This guide covers short-term rental laws in Wisconsin, from the state's limited oversight to requirements in major cities.
Understanding Wisconsin Short-Term Rental Laws
Wisconsin takes a local approach to short-term rental regulation, with minimal statewide oversight and significant authority granted to local jurisdictions. The state lacks comprehensive legislation on short-term rentals, instead providing statutory authorization for municipalities to regulate these properties through Wisconsin Statute 66.0615.
Local control has created a diverse regulatory landscape across Wisconsin, where vacation rental rules change dramatically between jurisdictions. Some communities welcome vacation rentals with minimal restrictions, while others have implemented comprehensive regulations on permitting, zoning, taxation, and operational standards.
This localized regulatory approach reflects Wisconsin's tradition of municipal autonomy. This allows communities to tailor regulations to their needs, property owners must navigate varying requirements based on location. A rental property management strategy that works in one Wisconsin town might be prohibited in a neighboring community.
The regulatory landscape has become more dynamic recently. As short-term rentals grow in popularity, especially in tourist destinations like Door County and Wisconsin Dells, more Wisconsin communities are developing regulations to address impacts on housing availability, neighborhood character, and local services. Regulations existing when you purchased a property may change, affecting your operational model and return on investment.
For property owners and investors, this evolving landscape makes thorough research and ongoing monitoring of local regulations essential. Understanding the specific rules for your property's location is the foundation of legal compliance and success in Wisconsin's short-term rental market.
Definition of a Short-Term Rental
Wisconsin state law doesn’t define short-term rentals; local jurisdictions establish their own definitions through municipal ordinances.
In Wisconsin, most municipalities define short-term rentals as renting a residential unit for less than 30 consecutive days. This timeframe aligns with standards in other states and serves as the threshold for local regulations and taxes.
Properties suitable for short-term rentals include:
- Single-family homes
- Condos and apartments
- Rooms within a dwelling
- Cabins and vacation properties
- Townhouses and duplexes
Traditional accommodations like hotels, motels, and bed and breakfasts fall under separate regulatory frameworks with specific licensing and operational requirements. The distinction between a bed and breakfast and a short-term rental can be blurry, but usually hinges on factors like food service, management presence, and the number of units.
Some Wisconsin municipalities may refine these definitions with additional criteria. For example:
- Distinctions between owner-occupied and non-owner-occupied properties
- Classifications based on rental frequency
- Separate categories for whole-house rentals versus room rentals.
- Special designations for properties in tourist areas or lakefront districts
Understanding your jurisdiction’s definition is crucial, as it determines the regulations governing your property and legal operation requirements. This requires consultation with local planning departments or municipal authorities to clarify your property’s classification under local ordinances.
Starting a Short-Term Rental Business in Wisconsin
Launching a short-term rental business in Wisconsin requires careful navigation of state tax requirements and local regulations, which vary significantly by location. Success depends on thorough research and adherence to evolving rules as communities refine their approach to vacation rentals.
1. Research local regulations
Before buying a property or converting an existing one to a short-term rental, investigate the regulations in your city, village, or town. Wisconsin's localized approach means requirements can vary dramatically even between neighboring communities.
This preliminary research is crucial in Wisconsin, where Milwaukee and Madison have implemented specific regulations for short-term rentals. Milwaukee requires a Tourist Rooming House permit and restricts rentals in certain residential zones, while Madison requires a Short-Term Rental Permit and has owner-occupancy requirements in some zones.
Start your research with your local government website, focusing on planning departments, zoning offices, and business licensing divisions. Look for ordinances addressing short-term or vacation rentals in municipal codes related to housing, business licensing, or zoning regulations.
2. Obtain Licenses and Permits
Wisconsin lacks a state-level licensing requirement for short-term rentals, but many cities, villages, and towns require local permits or licenses:
- Milwaukee requires a Tourist Rooming House permit.
- Madison requires a Short-Term Rental Permit.
- Green Bay requires a Tourist Rooming House License.
- Eau Claire requires a Short-Term Rental Permit.
Application processes vary by location, with some offering online systems and others requiring in-person submissions and inspections. Processing times range from a few days to several weeks, making advance planning essential, especially to begin operations during peak tourism seasons.
3. Understand Zoning Restrictions
Zoning regulations are a significant barrier to operating a short-term rental in Wisconsin. Many cities, villages, and towns restrict short-term rentals to specific zoning districts or impose conditions in residential zones.
Before purchasing or converting a property, verify that short-term rentals are permitted in your zone and if there are additional criteria like parking requirements, occupancy limits, or property type restrictions. This information is usually available through city or town planning departments or zoning offices.
In Milwaukee, short-term rentals are often restricted or conditionally permitted in certain residential zones. Madison's zoning districts dictate where short-term rentals are allowed, with owner-occupancy requirements in some residential zones, while Green Bay's ordinances specify where short-term rentals can operate, with restrictions in single-family areas.
4. Comply with Safety Standards
Safety requirements for Wisconsin short-term rentals typically include:
- Working smoke detectors
- Carbon monoxide alarms
- Fire extinguishers
- Emergency exit plans
- Compliance with building codes
- Proper electrical and plumbing systems
- Adequate sanitation facilities
Many jurisdictions require initial safety inspections for permit applications. For example, Milwaukee's Tourist Rooming House permit and Green Bay's Tourist Rooming House License involve inspections. These standards satisfy regulatory requirements and protect guests while minimizing liability for property owners.
5. Register for Tax Collection
Short-term rental operators in Wisconsin have tax obligations that include:
- Wisconsin state sales tax
- County sales tax
- Municipal room or lodging tax (rates vary by locality)
Platforms like Airbnb and Vrbo collect and remit some taxes for bookings in Wisconsin, but operators are ultimately responsible for fulfilling all tax obligations.
Operators must register with the Wisconsin Department of Revenue to collect and remit state and county sales taxes, and with local tax authorities for applicable room taxes. Clear record-keeping is essential for accurate tax reporting, including documentation of rental income, occupancy periods, and collected taxes. Many professional hosts use specialized software to track these obligations and ensure compliance.
6. Get Proper Insurance
Standard homeowners insurance typically doesn't cover commercial short-term rental activities, creating a potential coverage gap for unprepared operators. Adequate insurance for Wisconsin short-term rentals includes:
- Property coverage for the dwelling and contents
- Liability protection for guest injuries
- Business interruption coverage
- Coverage for theft or damage by guests.
Some Wisconsin municipalities may require proof of adequate insurance coverage for the permit application.
Many major insurers now offer specialized short-term rental policies or endorsements to standard homeowners policies. Platforms like Airbnb and Vrbo provide limited host protection programs, but with significant limitations and exclusions, making dedicated insurance advisable.
7. Establish Local Management
Some Wisconsin cities, villages, and towns require short-term rental operators to designate a local contact person for prompt issue response. This is crucial for out-of-state owners who cannot address emergencies or complaints.
The local contact must:
- Be available to respond to issues within a specified timeframe.
- Have property
- Be authorized to address problems.
For example, Green Bay may require a local contact, and Eau Claire may need a local agent if the owner is not local. For non-local owners, this often means hiring a professional property manager or establishing a relationship with a reliable local contact. The contact information must be provided to the permitting authority and sometimes to guests and neighbors.
Licensing Requirements
Wisconsin lacks a statewide licensing system for short-term rentals. Licensing and permitting requirements are determined locally, resulting in varied processes across jurisdictions.
Local licensing typically involves these elements, with specific requirements varying by jurisdiction:
Milwaukee
Milwaukee's requirements include:
- Tourist Rooming House permit
- Application, inspection, and annual fees
- Short-term rentals are often restricted or conditionally permitted in certain residential zones.
- Safety inspections
- Occupancy limits
- Parking and noise regulations
- Requirements to maintain records and provide guest information
Madison
Madison requires:
- Short-Term Rental Permit
- Application includes owner information, property details, and safety plan.
- Annual permits and fees
- Zoning districts dictate where short-term rentals are allowed, with owner-occupancy requirements in some residential zones.
- Safety standards
- Responsible agent requirements
- Occupancy limits
- Parking regulations
- Restrictions on the number of permits per operator
Green Bay
Green Bay's requirements include:
- Tourist Rooming House License
- Application process, inspections, and annual license fees
- Zoning ordinances specify where short-term rentals can operate, often restricting them in single-family residential areas.
- Safety inspections
- Maximum occupancy limits
- Parking, noise, and waste management regulations
- A local contact person is required.
Eau Claire
Eau Claire requires:
- Short-Term Rental Permit
- The application process includes property details, safety certifications, and owner information.
- Annual permit fees
- Zoning regulations limit or conditionally permit short-term rentals in certain residential zones, often favoring owner-occupied rentals.
- Safety standards
- Occupancy limits
- Parking rules
- Noise restrictions
- A local agent may be needed if the owner is not local.
Application processes involve submitting detailed information about the property and owner, including:
- Property address and specifications
- Owner identification and contact information
- Number of bedrooms and floor plans (if required).
- Local contact details
- Proof of insurance (if required)
- Certification of compliance with safety standards
License and permit fees vary by jurisdiction and are set by local authorities. These fees support the administration of rental regulations and inspection programs.
Local licenses and permits typically have defined validity periods requiring annual renewal. The process involves confirming compliance, updating property information if needed, and paying fees.
License Renewals
Maintaining valid licenses and permits for Wisconsin short-term rentals requires attention to local renewal processes and deadlines.
Local permit renewal requirements vary by jurisdiction:
- Renewal frequency and deadlines are set by local ordinances (typically annually).
- Milwaukee, Madison, Green Bay, and Eau Claire have annual permit or license requirements.
The renewal process involves:
- Submitting a renewal application before the expiration date.
- Paying renewal fees, often similar to initial application fees.
- Providing updated documentation, such as proof of continued insurance and tax compliance.
- Confirming ongoing compliance with regulations.
- In some cases, undergo re-inspection to verify ongoing safety compliance.
Property owners and managers must track renewal deadlines, as operating with an expired license or permit can result in penalties. Many jurisdictions impose fines for continued operation without valid authorizations, and some impose additional penalties for repeat violations, including the inability to legally operate.
Most authorities send renewal notices as a courtesy, but the responsibility for timely renewal rests with the property owner. Changes in contact information or mail delivery issues could result in missed notifications, making proactive tracking of renewal deadlines essential.
Failing to renew local permits can result in penalties, fines, and the inability to legally operate a short-term rental, disrupting business operations and revenue stream.
Required Documents
Operating a short-term rental in Wisconsin requires maintaining documents to demonstrate compliance with local regulations. These materials support the initial license application, facilitate ongoing operations, and may be requested during inspections or in response to complaints.
Essential documentation includes:
- Proof of property ownership (deed or tax statement) establishes your legal right to operate a short-term rental at the location and is important in jurisdictions with owner-occupancy requirements or restrictions on non-owner rentals.
- Detailed property information, including address, number of bedrooms, and floor plans (if required), is used by jurisdictions to determine maximum occupancy limits and ensure the property meets basic guest accommodation requirements.
- Owner and operator identification (driver's license, passport) and contact details ensure authorities can reach the responsible party and verify operators meet residency requirements for specific permit types.
- Local contact information if the owner is not locally based. This representative must be available to address issues promptly, especially for absentee owners who cannot respond to emergencies.
- Proof of adequate insurance coverage for short-term rentals. While not all Wisconsin municipalities require specific insurance documentation, having appropriate coverage is essential for protecting your investment.
- Federal and state tax identification numbers (EIN or SSN) are necessary for proper tax collection and remittance, particularly for state and county sales tax and local room taxes.
- Compliance certifications or affidavits related to safety, zoning, and occupancy. These documents verify that the property meets standards for guest safety and neighborhood compatibility.
Beyond these regulatory documents, responsible operators maintain additional records to support their business operations, including:
- Guest agreements and house rules
- Cleaning and maintenance logs
- Tax payment records and receipts
- Communications with local authorities or neighbors
Organizing these materials in physical and digital formats ensures quick access. Many professional hosts create comprehensive digital filing systems with backup copies of all critical documents, protecting against loss and enabling remote access.
Short-Term Rental Taxes
Wisconsin imposes significant tax obligations on short-term rental operators at both state and local levels. Understanding and fulfilling these tax responsibilities is essential for legal compliance and financial management of vacation rental properties.
Sales and Room Taxes
Wisconsin requires short-term rental operators to collect and remit state and county sales tax on rental income. Many municipalities impose a room or lodging tax. These rates vary by location:
- Milwaukee County and City Sales Tax, Wisconsin State Sales Tax, and a local room tax
- City of Madison Room Tax, Dane County Sales Tax, and Wisconsin State Sales Tax are applicable.
- Brown County Room Tax, Green Bay Sales Tax, and Wisconsin State Sales Tax are levied on short-term rentals.
- City of Eau Claire Room Tax, Eau Claire County Sales Tax, and Wisconsin State Sales Tax apply.
Short-term rental operators must register with the Wisconsin Department of Revenue to collect and remit state and county sales taxes, and with local tax authorities for room taxes. Registration requirements and procedures vary by jurisdiction, so check with the specific municipality and county tax departments where your property is located.
Tax Collection by Platforms
Major booking platforms like Airbnb and Vrbo collect and remit some taxes on behalf of hosts in Wisconsin, but operators remain responsible for ensuring all tax obligations are met. This is important for bookings made through other channels or platforms that don't collect taxes automatically and for any taxes the platforms don't collect.
Understand which taxes platforms collect and which ones you need to collect from guests.
Income Taxes
Rental income from short-term rentals in Wisconsin is subject to federal and state income tax.
Short-term rental operators can reduce their tax burden through various rental business-related deductions, including:
- Property depreciation
- Mortgage interest
- Property taxes
- Utilities and internet
- Cleaning and maintenance costs
- Furnishings and supplies
- Platform commission fees
- Marketing expenses
- Professional service fees
Property Tax Implications
Operating a short-term rental in Wisconsin may affect your property tax assessment. Property owners should assess their tax bill and understand if short-term rental activity changes its classification. Consultation with local tax assessors can clarify the implications of short-term rental operations on property tax assessments.
Proper record-keeping is essential for maximizing deductions while complying with tax regulations. Many professional hosts work with accountants specializing in short-term rentals to optimize their tax strategy and ensure accurate reporting.
Statewide Rules
Unlike states with comprehensive vacation rental legislation, Wisconsin has taken a hands-off approach at the state level, with minimal regulations for short-term rentals. This limited state framework has allowed local governments to exercise primary regulatory authority, leading to variation across the state.
Wisconsin state law focuses on:
- Legal Authorization: Wisconsin Statute 66.0615 allows municipalities to regulate short-term rentals but does not impose statewide regulations.
- Local Authority: Wisconsin enables local control over short-term rentals, allowing cities, villages, and towns to regulate these properties through ordinances.
- Tax Framework: The state requires state and county sales tax collection on short-term rentals and enables municipalities to collect room taxes.
- Building and Safety Codes: While not specific to vacation rentals, state building and health codes apply to all residential properties, including short-term rentals, ensuring basic safety standards.
There is no state-level preemption preventing local jurisdictions from creating and enforcing their own short-term rental regulations. This means municipalities have broad discretion to establish their own requirements, restrictions, and operational standards.
This minimal state framework means the regulatory landscape is defined almost entirely at the local level, with cities, villages, and towns exercising broad authority to establish their own requirements, restrictions, and operational standards.
For property owners and investors, this state-level approach creates opportunities and challenges. The absence of uniform statewide restrictions allows operation in areas with minimal local regulation, but it creates a complex patchwork of requirements across different jurisdictions.
Wisconsin currently has no plans for comprehensive statewide short-term rental legislation, so the current localized regulatory approach will continue.
Short-Term Rental Laws by City
Wisconsin's cities, villages, and towns have developed distinct short-term rental regulations, reflecting their unique housing markets, tourism patterns, and community priorities. Understanding these local regulations is essential for successful operation in different markets across the state.
1. Milwaukee Short-term Rental Laws
As Wisconsin's largest city, Milwaukee regulates short-term rentals through zoning and licensing requirements.
Overview: Milwaukee's definition aligns with rentals under 30 days, but specific zoning districts may have further limitations.
Key Regulations:
- Requires a Tourist Rooming House permit.
- Application, inspection, and annual fees are involved.
- Short-term rentals are often restricted or conditionally permitted in certain residential zones.
- Regulations cover safety inspections, occupancy limits, parking, and noise control.
- Milwaukee requires operators to maintain records and provide guest information.
Tax Rates:
- Milwaukee County and City Sales Tax
- Wisconsin State Sales Tax
- Local room tax
- Verify rates with the city and county.
2. Madison Short-term Rental Laws
As the state capital and home to the University of Wisconsin, Madison has a comprehensive ordinance for short-term rentals.
Overview: Madison defines short-term rentals as units rented for less than 30 consecutive days.
Key Regulations:
- Requires a Short-Term Rental Permit
- Application includes owner information, property details, and a safety plan.
- Annual permits and fees apply.
- Zoning districts dictate where short-term rentals are allowed, with owner-occupancy requirements in some residential zones.
- Madison's rules include safety standards, responsible agent requirements, occupancy limits, and parking regulations.
- There are restrictions on the number of permits per operator.
Tax Rates:
- Madison Room Tax
- Dane County Sales Tax
- Wisconsin Sales Tax
- Check current rates with the city and county.
3. Green Bay Short-term Rental Laws
Home to the Green Bay Packers, Green Bay regulates short-term rentals, requiring operators to register and comply with safety and operational guidelines.
Overview: Green Bay's short-term rental definition follows rentals for periods under 30 days.
Key Regulations:
- Requires a Tourist Rooming House License.
- Application process, inspections, and annual license fees are necessary.
- Zoning ordinances specify where short-term rentals can operate, often restricting them in single-family residential areas.
- Green Bay's regulations address safety inspections, maximum occupancy, parking, noise, and waste management.
- A local contact person is required.
Tax Rates:
- Brown County Room Tax
- Green Bay Sales Tax
- Wisconsin State Sales Tax
- Verify current rates with local authorities.
4. Eau Claire Short-term Rental Laws
Located in western Wisconsin, Eau Claire has established short-term rental ordinances focusing on permits, safety, and maintaining residential neighborhoods.
Overview: Eau Claire defines short-term rentals as lodging for less than 30 consecutive days.
Key Regulations:
- Requires a Short-Term Rental Permit
- The application process includes property details, safety certifications, and owner information.
- Annual permit fees apply.
- Zoning regulations limit or conditionally permit short-term rentals in certain residential zones, often favoring owner-occupied rentals.
- Eau Claire enforces safety standards, occupancy limits, parking rules, and noise restrictions.
- A local agent may be needed if the owner is not local.
Tax Rates:
- Eau Claire Room Tax
- Eau Claire County Sales Tax
- Wisconsin State Sales Tax
- Confirm current tax rates with the city and county.
Bottom Line
Successfully operating a short-term rental in Wisconsin requires navigating the state's localized regulatory landscape. With minimal state-level guidance beyond statutory authorization for local control and significant local variation, property owners must take a location-specific approach to compliance and operational planning.
Before investing in a short-term rental property in Wisconsin:
- Research thoroughly - Understand state tax requirements and local regulations, including permitting, zoning, and operational standards. This research should be location-specific and include consultations with city or town planning departments, tax offices, and legal advisors familiar with the jurisdiction.
- Consider location carefully - Local regulations may make some areas significantly more favorable for short-term rental investments than others, even within the same region. Some cities have clear permitting processes, while others have more restrictive approaches, particularly in residential zones.
- Budget for compliance costs - Factor in state tax registration, local permit fees, insurance, and ongoing regulatory compliance expenses. These costs vary across Wisconsin, so incorporate them into your financial planning.
- Implement professional management practices - Regardless of specific requirements, professional standards for guest screening, property maintenance, noise management, and neighbor relations help prevent problems and support business sustainability.
- Stay informed about regulatory changes - Wisconsin's short-term rental regulations are evolving locally, with many communities updating their approaches in response to market growth and community feedback. Monitoring local government communications and participating in local host associations can help you stay ahead of regulatory changes.
Wisconsin's short-term rental landscape presents opportunities and challenges. By understanding state tax requirements and local regulations, operators can build successful businesses that positively contribute to Wisconsin's tourism and housing economy while maintaining good relationships with local communities and authorities. Proper compliance avoids penalties and supports the long-term viability of your vacation rental investment in the Badger State.
