The Indiana Legislature has stipulated that a short-term rental of owner-occupied short-term rental property is a permitted residential use under any applicable zoning ordinance. No county, municipality, or township may disallow such use in any zoning ordinance, zoning district, or classification that permits residential use. (Ind. Code § 36-1-24-8.) The rules and restrictions discussed in this section do not apply to a county, municipality or township that has adopted a zoning ordinance or any other ordinance before January 1, 2018 prohibiting, regulating or restricting short-term rentals in any manner.  Moreover, a county, municipality or township who has such an ordinance before January 1, 2018 may amend or delete any of its provisions without complying with or becoming subject to the rules and regulations addressed in this section.  However, if the ordinance is repealed, the county, municipality or township concurrently becomes subject to these rules and regulations.

Indiana law considers an “owner” to be a person with an interest in title or a present possessory interest in property that is offered to the public as a short-term rental. “Owner-occupied short-term rental property” is a property that is the owner’s primary residence and is also offered to the public as a short-term rental. “Short-term rentals” are rentals for terms of fewer than 30 days at a time through a short-term rental platform. This definition can include dwelling units in multifamily communities. The term does not include property that is used for any nonresidential use. (Ind. Code § 36-1-24-6.) A “short-term rental platform” is an entity that: 1.) provides a platform through which unaffiliated parties offer to rent a short-term rental to an occupant, and; 2.) collects consideration for the rental from the occupant. (Ind. Code § 36-1-24-7.)

For a short-term rental property that is not an owner-occupied short-term rental property, a locality may require a special exception, special use, or zoning variance for the short-term rental property in a residential zoning district or classification. However, the locality may not interpret and enforce its zoning regulations for a special exception, special use, or zoning variance in a manner intended. Likewise, zoning may not have the effect of prohibiting or unreasonably restricting any short-term rental of property that is not owner-occupied. Denial of a special exception, special use, or zoning variance for the short-term rental property may be appealed. (Ind. Code § 36-1-24-9.)

A county, municipality, or township may enact or enforce law or plan regulating, prohibiting, or limiting short-term rentals only for the following primary purposes:

1. Protection of the public’s health and safety related to:

a. fire and building safety,
b. sanitation,
c. transportation,
d. traffic control, and,
e. pollution control, if enforcement under a.) through e.) is performed in the same manner as enforcement that applies to similar properties that are not short-term rentals;

2. Residential use and zoning related to:

a. Noise,
b. Protection of welfare,
c. Property maintenance, and;
d. Nuisance issues, if enforcement under a.) through d.) is performed in the same manner as enforcement that applies to similar properties that are not short-term rentals;

3. To limit or prohibit the use of short-term rentals for the following purposes:

a. to house sex offenders,
b. to operate a structured sober living home,
c. to manufacture, exhibit, distribute or sell illegal drugs, liquor, pornography, or obscenity,
d. to operate an adult entertainment establishment (as defined in Indiana Code § 12-7-2-1.8);

4.) To limit or prohibit short-term rentals located within the boundaries of a conservancy district established under Indiana Code § 14-33, or;

5.) To provide the unit with an emergency contact for a short-term rental. ( Code § 36-1-24-10.)

A county, municipality, or township may require an owner or operator to obtain a permit for property offered to the public as short-term rentals. For permit application requirements, see (Indiana Code § 36-1-24-11.) Permits are non-transferrable. (Ind. Code § 36-1-24-17.) If the information in a permit application changes, the owner or operator must provide updated information within thirty business days. (Ind. Code. § 36-1-24-12.) A short-term rental permit expires one year after its issue. A locality may charge a fee of no more than $150 for an initial permit and for a permit after an owner’s previous permit has been revoked. (Ind. Code § 36-1-24-13.) It may not charge a permit fee for renewing a permit, including renewal of an expired permit. (Ind. Code § 36-1-24-13.)

In the event an owner or operator has been issued three or more citations for ordinance violations for a permitted property within one calendar year, the county, municipality, or township may revoke the permit for a period of up to one year after the date of the revocation. The owner or operator is entitled to notice and a hearing for the revocation. (Ind. Code § 36-1-24-14; Ind. Code § 36-1-24-15.) If a permit is revoked, the owner or operator may not obtain a new permit until s/he pays any outstanding fines for ordinance violation citations related to the use of the short-term rental. (Ind. Code § 36-1-24-16.)

An owner or operator who rents a short-term rental without a valid permit from a county, municipality, or township that has adopted an ordinance requiring such a permit commits a Class C infraction. (Ind. Code § 36-1-24-18.) Each short-term rental transaction completed without a valid permit constitutes a separate violation. (Ind. Code § 36-1-24-18.) An owner or operator who makes a short-term rental in which payments for the room, lodging or other accommodation are not made through a marketplace facilitator (as defined by Indiana Code § 6-2.5-1-21.9) may be liable for collecting and remitting the following taxes on consideration received by the owner or operator for the short-term rental: 1.) state gross retail tax imposed under Indiana Code § 6-2.5-4-4, and 2.) innkeeper’s tax imposed under Indiana Code § 6-9.

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