Short‑Term Rental (STR) Guide for Carbondale, Pennsylvania

Prepared for prospective STR investors – concise, actionable, and anchored in the statutes and guidance that apply to Carbondale (Lackawanna County), PA.

1. Allowability Overview

Short‑term rentals are permitted in Carbondale, PA provided the activity complies with the applicable state framework and any local zoning or licensing requirements that the Borough may impose.

• State level: Pennsylvania treats “lodging establishments” (including private residences rented for < 30 days) as subject to the Commonwealth’s hotel‑occupancy‑tax regime and a set of safety‑record‑keeping provisions (see Section 2).
• Local level: No borough‑specific STR ordinance is included in the supplied sources. Consequently, investors must confirm with the Carbondale Borough Council / Borough Manager whether any zoning, permits, or additional local taxes apply.

Bottom line: Until a borough‑specific prohibition or restriction is identified, a STR may be operated legally in Carbondale, PA, once the state‑level obligations are met.

2. State‑Level Legal Framework (Pennsylvania)

| Topic | Requirement / Statute | Practical Impact for Carbondale STRs | |-------|----------------------|--------------------------------------| | Definition of “lodging establishment” | 48 Pa.C.S. § 1311(g) – any building held out to the public for overnight lodging for < 30 days (includes private homes) | Your private residence falls under the “lodging establishment” definition, so you must meet all hotel‑related obligations. | | Hotel Occupancy Tax (H.O.T.) | 6 % state tax on gross rent (plus possible local add‑on) (Tax Reform Code of 1971, § 209) | You must collect and remit 6 % (plus any local county rate – see Table 1 below). | | Local Hotel Taxes | County‑imposed rates (see Table 1) | Lackawanna County imposes 4 % (third‑class county rate). Total tax = 6 % + 4 % = 10 % of gross rent. | | Booking‑Agent Collection | Booking agents (Airbnb, VRBO, etc.) must collect the H.O.T.; if you use a platform, it may already be collecting the tax on your behalf, but you must still file a monthly return. | Verify with the platform that it remits PA tax; otherwise, register with the PA Department of Revenue. | | Sales/Use & Hotel‑Occupancy Tax License | Register for a PA Sales, Use & Hotel Occupancy Tax License (PA Dept. of Revenue). | Required before you can collect tax; obtain license number and include it on all invoices. | | Personal Income Tax | Net STR income is subject to PA personal‑income tax (3.07 % for 2024‑25) and is reported on Schedule E (federal) and the PA‑40 (state). | Track deductible expenses (maintenance, utilities, cleaning, insurance, mortgage interest, etc.) to minimize taxable net income. | | Safety & Inspection Requirements | “Lodging establishments” must comply with the Fire and Panic Act, Life‑Safety Codes, and maintain smoke & CO alarms, fire extinguishers, and egress windows in every bedroom. | Perform a self‑inspection (or hire a certified inspector) before opening; keep a copy of the inspection report. | | Record‑Keeping | Keep guest logs for two years: guest name, address, phone, email, check‑in/out dates, and number of occupants. | Required for tax audit and potential public‑health emergencies. | | Insurance | Homeowner’s policies often exclude “business use”; obtain a commercial guest‑liability rider or a separate short‑term rental policy (e.g., HostShield, Slice, or your insurer’s “home‑share” endorsement). | Minimum coverage recommended: $1 M guest liability; consider loss‑of‑income and property‑damage riders. |

Table 1 – Pennsylvania Hotel‑Occupancy Tax Rates (2025)

| Tax Component | Rate | Applicable To | |---------------|------|----------------| | State H.O.T. | 6 % | All “lodging establishments” | | Local Add‑On (Lackawanna County) | 4 % | County‑wide rate for third‑class counties | | Total | 10 % | All STR stays in Carbondale |

3. Local Authority & Verification Steps

| Authority | Contact | What to Verify | |-----------|---------|----------------| | Carbondale Borough (Lackawanna County) | Phone: (570) 282‑3686 <br> Email: borough@carbondalepa.gov <br> Website: <www.carboncog.org/> (official municipal site) | • Zoning district of the property (residential vs. commercial) <br> • Whether a local STR permit/license is required <br> • Any borough‑specific occupancy, parking, noise, or signage limits | | Lackawanna County Planning Department | Phone: (570) 963‑6735 <br> Website: <www.lackawannacounty.gov/> | • County‑wide building‑code inspections for “lodging establishments” <br> • Any county‑imposed safety checks | | PA Department of Revenue – Business Tax Unit | Phone: (717) 783‑8467 <br> Website: <www.revenue.pa.gov/> | • Sales/Use & Hotel Occupancy Tax License issuance <br> • Monthly filing portal (myPATH) | | PA Department of Labor & Industry (for worker safety if you hire staff) | Phone: (717) 787‑3322 | • Compliance with any local employment regulations |

Investor Action: Call the Borough offices first. Confirm that the property is located in a zoning district where “lodging establishments” are a permitted or conditional use. If a local permit is required, obtain it before applying for the state tax license.

4. How to Launch a Short‑Term Rental in Carbondale, PA

1. Confirm Zoning Eligibility

   • Contact the Borough Zoning Officer (see contact table).
   • Request a zoning‑compliance letter stating that short‑term rentals are allowed for the parcel.

2. Secure Proof of Ownership

   • Deed, title report, or county assessor’s parcel page.
   • If ownership is held through an LLC or trust, provide the governing documents.

3. Register for State Tax Accounts

   • PA Sales, Use & Hotel Occupancy Tax License: submit Form REV‑819 (or register online via myPATH).
   • Obtain a PA Business Income Tax Account (if you’ll file as a sole‑prop or single‑member LLC).

4. Obtain a Local Permit (if required)

   • The Borough may issue a Short‑Term Rental Registration Certificate (fee varies; typical $100‑$200).
   • Provide the same documentation as for the state license plus proof of zoning compliance.

5. Prepare Safety & Life‑Safety Documentation

   • Photo evidence of smoke/CO alarms, fire extinguisher, egress windows, and any required sprinkler systems.
   • Schedule a municipal building inspection (if the Borough requires it) or obtain a certificate from a licensed inspector.

6. Secure Adequate Insurance

   • Purchase a short‑term rental policy (or add a guest‑liability rider to your homeowner’s policy).
   • Minimum recommended coverage: $1 M guest liability; consider loss‑of‑income protection.

7. Set Up the Guest‑Log System

   • Maintain a digital or paper ledger (see Section 2).
   • Store data for at least two years.

8. Launch Advertising

   • Include the Borough STR license number (if required) and the PA Sales Tax License number in every listing (Airbnb, VRBO, etc.).
   • Publish the property’s address, maximum occupancy, and local contact person (must be available 24 / 7 within 60 minutes).

9. Collect & Remit Taxes

   • Monthly: Calculate total gross rent, apply the 10 % combined tax, and file the PA Hotel Occupancy Tax Return (via myPATH).
   • Quarterly (if applicable): Submit PA personal‑income‑tax estimates based on net STR profit.

5. Required Documents, Permits, Licenses & Guidelines

| Item | Source | What to Provide | |------|--------|-----------------| | Proof of Ownership | County Recorder/Assessor | Deed, title abstract, or county parcel sheet | | Zoning‑Compliance Letter | Borough Zoning Officer | Statement that the parcel may be used for lodging | | PA Sales, Use & Hotel Occupancy Tax License | PA Department of Revenue | Completed Form REV‑819 (or online registration) | | Borough STR Registration (if required) | Borough Clerk | Application, fee, copy of ownership proof, zoning letter | | Safety Inspection Report | Municipal Building Dept. or certified private inspector | Photos of smoke/CO alarms, fire extinguisher, egress windows | | Insurance Certificate | Insurer | Minimum $1 M guest liability; endorsement naming the Borough as additional insured (optional) | | Guest‑Log Template | Self‑maintained | Two‑year retention of guest information | | Business Registration (PA‑Local) | PA Department of State (if operating as an LLC, Corp.) | Articles of organization, EIN confirmation |

Guidelines to Observe

• Occupancy: Pennsylvania does not impose a statewide occupancy cap; the Borough may set one (commonly “2 persons per bedroom + 2 extra”). Verify locally.
• Noise & Nuisance: Follow local noise‑ordinance limits (typically 10 p.m.–7 a.m.).
• Parking: Provide off‑street parking for the maximum number of guests; adhere to any residential parking rules.
• Local Contact: Designate a responsible person who can be reached 24 / 7 within 60 minutes (must be a Carbondale resident or property manager residing within 30 mi).
• Signs & Advertising: No commercial signage exceeding 2 sq ft without a permit; keep listings discreet to preserve neighborhood character.

6. Key State Regulations Applicable to Carbondale, PA

1. Hotel Occupancy Tax (6 % + 4 % local = 10 % total) – payable monthly.
2. Booking‑Agent Collection – platforms must remit tax; you must verify they do so.
3. Safety Codes – smoke/CO alarms, fire extinguishers, egress windows, and compliance with the Fire and Panic Act.
4. Record‑Keeping – retain guest logs for two years.
5. Insurance – guest‑liability coverage required (minimum $1 M recommended).
6. Zoning Authority – municipalities may restrict STRs to certain districts