Overview and Straight Answer

Indianola is an unincorporated community in Kitsap County, Washington. Short-term rentals (STRs) are allowed to operate there today. Kitsap County is the relevant local authority. As of the latest county documents (spring 2019), STRs can be located in any residential or commercial area in unincorporated Kitsap County. However, the county’s current regulatory framework is limited and largely unenforced except for health and safety issues. A 2016 vacation rental code requiring a Conditional Use Permit is in place but has been deferred, and the county has been updating its STR policies through public outreach since early 2019. Because Indianola has no city government, county rules—and state-level lodging taxes—apply directly.

Bottom line: you can operate an STR in Indianola (Kitsap County) now, but you must comply with state lodging taxes (4% combined: 2% state, 2% county) and should prepare for eventual county-level registration or permitting once finalized. At present, enforcement is complaint-driven and focused on health and safety concerns.

How to Start a Short-Term Rental Business in This Market

• Decide on your operating model:
  • Entire-home rentals (whole house, cottage, cabin, ADU)
  • Room/secondary suite rentals (owner-occupied or not)
• Confirm zoning and use:
  • In unincorporated Kitsap County (including Indianola), STRs may be located in residential and commercial areas.
  • If you are within a neighborhood with covenants (CC&Rs), confirm any HOA restrictions before listing.
• Register and set up tax compliance:
  • Register with the Washington State Department of Revenue (DOR) and enroll in the Statewide Combined Sales Tax program for lodging businesses.
  • Collect and remit the lodging tax: 2% state + 2% Kitsap County = 4% total.
  • Note: Airbnb currently collects and remits lodging tax for Washington on behalf of hosts. If you use other platforms (VRBO, etc.), confirm whether they collect and remit; if not, you must collect and remit yourself.
• Build your operations and guest management plan:
  • Define house rules to address common neighbor concerns (quiet hours, occupancy limits, parking, trash, shoreline/beach etiquette, and no events/weddings).
  • Provide on-site or local contact information for guests and neighbors.
  • Implement safety measures: smoke detectors, carbon monoxide detectors, fire extinguishers, first aid kit; verify egress clarity; be mindful of water/septic capacity for larger gatherings.
• Marketing and compliance:
  • List on platforms (Airbnb, VRBO, etc.) and ensure your rules are clearly displayed.
  • If you use a management company, confirm their process for guest screening, rapid response, and compliance with local rules.
• Track county updates:
  • Monitor Kitsap County’s STR policy development for final rules, registration/licensing, inspections, and fee schedules.

Required Documents, Permits, Licenses, and Guidelines

• State-level tax registration:
  • Washington Department of Revenue registration and Statewide Combined Sales Tax enrollment (lodging).
  • Collect/remit lodging tax: 2% state + 2% Kitsap County = 4%.
• Current county requirements:
  • Conditional Use Permit (CUP) may technically be required under existing county code; however, enforcement is deferred except for health/safety issues.
  • Bed & Breakfast (B&B) rules are separate and not expected to change under the STR update process.
• Lodging tax obligations:
  • The 4% lodging tax applies to lodging charges for periods under 30 consecutive days (includes hotels, motels, private campgrounds, B&Bs, RV parks, personal home/room rentals, STRs, and similar facilities).
• Consumer protection and safety:
  • Adhere to health and safety best practices: smoke/CO detection, fire safety, emergency info.
• Future local requirements (likely in development):
  • County registration/licensing, neighbor notification, occupancy and parking limits, quiet hours, inspections, and complaint/enforcement procedures (final rules pending).

Specific Regulations by Jurisdiction

• City of Indianola:
  • No city government. City-specific regulations do not apply. County code and state law govern.
• Kitsap County (unincorporated areas):
  • Current code requires CUP for STRs but enforcement is deferred (health/safety only).
  • STRs are allowed in any residential or commercial area of unincorporated Kitsap.
  • County is developing updated policies to balance guest protection, safety, and neighborhood impacts. Process includes public outreach; final rules, fees, and permit/registration timelines are not specified in provided documents.
  • Lodging tax: 4% total (2% state, 2% county).
  • Community concerns frequently cited: noise, parking, disrespectful guests, shoreline intrusions, lack of host responsiveness, safety, septic/overuse, traffic, and large events.
  • Complaint-driven enforcement; ongoing discussions on inspections, registration, host management, quiet hours, occupancy caps, and neighbor communication.
• Washington State:
  • Lodging tax framework (hotel/motel tax) applies; 2% state portion due on lodging charges for less than 30 consecutive days.
  • County imposes an additional 2% special excise tax (Kitsap County).
  • No state-level ban or prohibition on STRs; state law governs the tax structure and reporting.

Contact Information

• Eric Baker, Policy Manager
  • Phone: (360) 337-4495
  • Email: ebaker@co.kitsap.wa.us
• Jennifer Cannon, Policy Analyst, Kitsap County Commissioners Office
  • Phone: (360) 337-7051
  • Email: jjcannon@co.kitsap.wa.us
• Project and updates webpage:
  • www.kitsapgov.com/BOC_p/Pages/STR.aspx
• Sign up for project updates (email list):
  • public.govdelivery.com/accounts/WAKITSAP/subscriber/new
• Short-Term Rental Survey Page:
  • kcowa.us/strsurvey
• Washington State Department of Revenue – Lodging/Tourism Taxes:
  • dor.wa.gov/find-taxes-rates/other-taxes/special-hotelmotel-tax
• Airbnb – Washington State Occupancy Tax Collection:
  • www.airbnb.com/help/article/2336/occupancy-tax-collection-and-remittance-by-airbnb-in-washington

Links to Source Pages

• Kitsap County STR Policy Development and Public Outreach: www.kitsapgov.com/BOC_p/Pages/STR.aspx
• Project updates and email list: public.govdelivery.com/accounts/WAKITSAP/subscriber/new
• STR Survey page: kcowa.us/strsurvey
• Washington DOR lodging tax information: dor.wa.gov/find-taxes-rates/other-taxes/special-hotelmotel-tax
• Airbnb occupancy tax information for Washington: www.airbnb.com/help/article/2336/occupancy-tax-collection-and-remittance-by-airbnb-in-washington
• STR Outreach Survey Summary (PDF): www.kitsap.gov/BOC_p/Policy%20Documents/2STR%20Outreach-Survey%20Summary%20June19.pdf
• Public Comments on STR Policy Development (PDF): www.kitsap.gov/BOC_p/Policy%20Documents/Attachments_PublicCommentSTVR_Jan-Ju12_19.pdf

Note: Based on the provided documents, Indianola STRs are permitted in unincorporated Kitsap County, but county permitting and enforcement are in transition. Investors should plan to comply with the 4% lodging tax and prepare for evolving local requirements.