Indianapolis

Who applies

A permit application must be made by an owner, or by an officer or agent if the owner is a company.[1] State law defines an owner as a person with an interest in title or a present possessory interest in the property.[3]

If you manage for an owner

The application can list a property manager, so an owner can hold the permit while you manage the rental.[1]

Annual permit

Each short-term rental unit is permitted individually with the Department of Business and Neighborhood Services, and a permit expires one year after it is issued.[1] The city says the program took effect Jan 1, 2025.[2] The application lists the owner, any property manager, how the unit is advertised, the advertised occupancy limit and the building type.[1]

Permit fee

The city charges $150 for an initial permit, and again for a new permit after a revocation.[1] State law caps the fee at $150 and bars a fee to renew.[3]

No transfers

If an owner sells all or part of a permitted property, the permit can't go to the new owner, who must apply for a new permit.[3]

Eligible buildings

A rental must be in a legally built dwelling unit that meets building code, inside a primary building or in an accessory building that meets the secondary dwelling unit rule.[1] State law also counts a detached guest house if the whole property is designated for single-family residential use.[3]

Banned structures

Recreational vehicles, mobile homes, travel trailers, automobiles, shipping containers and similar structures can't be short-term rentals, and neither can any structure not intended for permanent human occupancy.[1]

Parking and signs

Parking must meet the zoning code's parking articles and chapter 931 of the city code, and signs must meet its sign article.[1]

Inspection

At the annual registration, the city may require an inspection to check that the unit meets building codes and is safe and habitable.[1]

Zoning and associations

State law lets a city require a special exception, special use or variance for a rental that isn't owner occupied in a residential zoning district, but not in a way that prohibits or unreasonably restricts rentals.[3] Chapter 852 says short-term rentals need no development plan approval, and we did not read the zoning ordinance.[1] Homeowner and condo association rules stay in force.[3]

State sales tax

Indiana's sales tax is 7%, and DOR says renting rooms or accommodations for less than 30 days needs additional tax registration.[5] You need a Registered Retail Merchant Certificate to make retail sales.[5]

County innkeeper's tax

Marion County's innkeeper's tax is 10%, effective 09/01/09, and DOR is the collection point.[4] It applies to rentals of rooms and accommodations for periods of less than 30 days, in addition to state sales tax.[4]

Booking platforms

Since July 1, 2019, marketplace facilitators that facilitate rentals of less than 30 days must collect the county tax and send it directly to DOR.[4] The page doesn't say who collects on a direct booking, so ask DOR before you take direct bookings.

Returns and penalties

File a return even when there was no activity, because late returns carry a penalty of up to 20%, with a minimum of $5.[4]

Enforcement tools

Owners who don't comply may face inspection, citations or revocation of the permit.[1]

Revocation

With three or more citations for a permitted property in a calendar year, the city may revoke the permit for up to one year, after notice and a hearing.[3] After a revocation, the owner pays the $150 fee again for a new permit.[1]

No permit

Renting a short-term rental without a valid permit is a Class C infraction, and each rental transaction completed without a permit counts as a separate violation.[3]

Limits on city rules

State law lets a city regulate short-term rentals only for listed purposes, such as fire and building safety, noise, nuisance, zoning, and getting an emergency contact.[3]