Property owners must collect and pay retail sales tax on the rental charges. They also need to pay lodging and convention and trade center taxes.When you report earnings, you can claim rental expenses and other deductions. Short-term rental property owners must obtain a business license. Residential Rental Forms. This article will provide shortterm rental businesses with an overview of potentially applicable Washington state and local tax requirements. Understand how to managing lodging taxes on your short-term vacation rental in the state of Washington. Ideal for hosts using Airbnb, HomeAway, or VRBO. To sign up for Square Payroll in Washington, you must be registered with the appropriate tax agencies so we can pay and file your state taxes. There is a line on the W-4 that allows you to specify how much you want withheld.