Statewide STR Preemption Shifts: 2026 Legislative Impacts in Idaho and Indiana

Executive Summary

• Idaho HB 583 Preemption: Solidifies property rights by restricting local municipalities from outright banning STRs, though health and safety regulations remain permitted.
• Indiana HB 1210 Caps: Grants local authorities the power to implement density caps and distance buffers, severely impacting clustered investment models.
• Regulatory Fragmentation: Investors face a complex web where state protections frequently clash with aggressive municipal loopholes.

Key Regulatory Provisions

Operator Eligibility

Idaho's framework generally protects the right of LLCs and out-of-state investors to operate, nullifying local primary-residence mandates. Conversely, Indiana's new law allows municipalities to tightly restrict eligibility based on local density caps.

Deed Transferability

Under Idaho preemption, STR operating rights are generally protected and survive property transfers, providing stability for exit valuations. In Indiana, local municipalities can dictate transferability, often revoking permits upon sale to enforce density reduction.

Unbundled Tax Stack

• Idaho: State sales tax (6%) plus applicable local resort/auditorium district taxes.
• Indiana: State sales tax (7%) plus county innkeeper's tax (frequently 5-10%).
• Combined Impact: Operators must meticulously configure platform tax collection to avoid severe state audit penalties.

Enforcement & Penalties

Both states emphasize health, safety, and nuisance enforcement. While Idaho restricts bans, it empowers cities to revoke licenses for repeated noise, parking, and trash violations. Indiana cities are leveraging these nuisance codes to actively reduce their STR populations.

Investor Due Diligence Takeaway

Idaho remains a highly attractive environment for institutional capital due to statewide preemption protecting property rights. Indiana requires hyper-local, block-by-block due diligence to avoid sudden density cap exclusions.