Executive Overview and Bottom Line

Short‑term rentals (STRs) are allowed and operating in Sullivan County and, by extension, in the Village of Monticello. The county imposes a five percent (5%) occupancy tax on STR rents under Section 182‑24 of the Sullivan County Code. Monticello is moving to increase oversight: in August 2024 the Village passed Local Law #7, which amends Chapter 202 “Rental Permits” by adding new subsections 202‑3(c), 202‑4a, and 202‑5(b)(3)(a–e). As of the current public record, the Board has indicated an interest in registration and data gathering, but a clear, complete STR‑specific permitting text is not publicly posted. For now, STR investors should proceed under the county’s tax framework while tracking Monticello’s evolving rental permit rules.

Market Entry: How to Start an STR in Monticello

• Confirm zoning and use. STRs should be an allowed use in the zoning district of your property; if not, a use variance or zoning amendment would be required. Treat this as a threshold diligence item.
• File for municipal approval. Monticello is adding STRs to its rental permit regime via Local Law #7. Expect to apply for a rental permit before you advertise or collect rent. The Building Department and Village Clerk’s office typically administer permits—contact them for current forms, timelines, and inspection requirements.
• Comply with Sullivan County’s 5% STR tax. Collect and remit the five percent tax on all STR rents in Sullivan County. This is a county‑level requirement that applies regardless of municipal approval.
• Notify and register with the tax authority. Use the Sullivan County Division of Real Property Tax Service Office or the County Treasurer’s office to set up reporting for the 5% tax. Keep monthly records of gross rents and tax collected.
• Prepare for inspections. Plan for initial and periodic safety inspections. New York municipalities commonly require smoke and carbon monoxide detectors, functioning egress, and safe exterior conditions.
• Standard STR onboarding. Publish listings only after permits are issued. Maintain compliance with state and local rules, prepare guest information, and retain records for at least three years.
• Monitor legislative updates. Monticello’s Board has voiced the need to understand prevalence and to regulate STRs, including registration and potential caps or location limits. Engage early with Village officials to shape compliant operations.

Documents, Permits, Licenses, and Operational Guidelines

• Municipal permit. Monticello’s Chapter 202 Rental Permits applies; expect a rental permit (and potentially an STR endorsement or certificate) to be required prior to operation.
• Tax registration. Sullivan County’s 5% STR tax requires registration with the county (Division of Real Property Tax Service or Treasurer) and monthly filings.
• Insurance. Maintain general liability coverage appropriate for transient lodging; consider property and business interruption coverage.
• Safety and occupancy. Be prepared to demonstrate smoke and carbon monoxide alarms, safe egress, fire safety, and occupancy limits consistent with state and local standards.
• Posting and guest information. Provide emergency contacts, house rules, and local regulations to guests; many municipalities require a guest‑facing information sheet.
• Recordkeeping. Keep permit documents, guest logs, remittances, and inspection reports on file. STRs must maintain detailed records for tax and municipal reporting.
• Inspections. Schedule and pass all required inspections (e.g., building, fire, health) before hosting guests.

Regulations: City, County, and State Rules

Monticello (Village) STR Snapshot

• Status: Allowed and subject to local permitting under Chapter 202 “Rental Permits.”
• New additions: Local Law #7 amends Chapter 202 by adding 202‑3(c), 202‑4a, and 202‑5(b)(3)(a–e). The Board has discussed registration, data gathering, and oversight of STRs given unregulated growth. Final, detailed rules (permit processes, fees, inspections, caps, and location restrictions) are not publicly posted.
• Focus: The Village Attorney has indicated the first step is to obtain registration to assess prevalence and to regulate sensibly to address community concerns.
• Action for investors: Proceed under existing rental permit requirements, but watch for upcoming rules, fees, and reporting mandates.

Sullivan County STR Tax

• County code: Section 182‑24 imposes a five percent tax on the rent collected from STRs located in Sullivan County.
• Tax destination: Revenue supports local groups such as the Sullivan County Visitors Association.
• Compliance: Register, collect, and remit the tax monthly; maintain accurate records of gross receipts.

New York State

• Taxation: State sales tax (and local sales tax, if applicable) may apply to occupancy or related services, in addition to the Sullivan County STR tax. Confirm sales tax obligations with the New York State Department of Taxation and Finance based on your business model.
• Safety and building codes: STRs must comply with New York’s Building Code and Fire Code requirements for residential occupancy and transient lodging. Ensure proper smoke/CO detection, egress, and occupancy standards.
• Local zoning: Municipal zoning determines whether STRs are permitted as a primary use in a given district and may impose density, cap, or separation rules.

Contacts and Official Resources

• Monticello Village Attorney: Michael Sussman. The Village Board and Attorney have publicly discussed STR registration and oversight. Investors should request guidance on rental permits and enforcement.
• Sullivan County Division of Real Property Tax Service Office: Handles property tax matters and may coordinate STR tax registration with the County Treasurer. Confirm filing and remittance procedures for the 5% STR tax.
• Sullivan County Treasurer: Administers county‑level taxes. Seek instructions for setting up monthly remittance of the 5% STR tax.
• NYS Department of State (DOS): Building Code and Fire Code requirements for residential and transient occupancies.
• NYS Department of Taxation and Finance: Clarify sales tax applicability for STR operations and lodging services.

Note: Specific phone numbers and emails for Monticello’s Building Department and Village Clerk, and for the County offices, are not provided in the available content. Investors should obtain current contact details directly from the respective websites or municipal offices.

Key Takeaways and Next Steps

• STRs are allowed and taxable in Sullivan County and Monticello.
• Monticello is moving to regulate STRs through its rental permit regime (Local Law #7). Expect registration and compliance to become mandatory; detailed rules are pending.
• Register for and remit Sullivan County’s 5% STR tax; assess any state sales tax obligations.
• Before acquiring or listing, verify zoning, apply for permits, complete inspections, and secure appropriate insurance.
• Engage early with Village officials to anticipate caps, location limits, or reporting requirements.

Important Sources and Where to Learn More

• Sullivan County’s five percent STR tax (Section 182‑24 of the Sullivan County Code) and its economic rationale are discussed in “Pros and Cons of Short‑Term Rental Regulations” by Alexander G. Main, Esq., published in the Sullivan County Partnership In the Know Magazine (March 2023 edition).
• Monticello’s STR‑focused permitting amendments (Local Law #7 amending Chapter 202 “Rental Permits”) and the Board’s regulatory intent are reported in “Monticello has their eyes on short‑term rentals,” Sullivan County Democrat, posted August 13, 2024.
• For municipal context and county‑level oversight in Sullivan County, see the law firm’s discussion in the Sullivan County STR article referenced above.

This guide is for informational purposes only and does not constitute legal advice. Consult qualified municipal and tax counsel to tailor compliance to your property and business plan.