Elizabeth,
Looking at this purely from a US tax law perspective, the primary difference between a host and a co-host is ownership*.
* Ownership here means ownership of the Listing...the Bed & Breakfast operation itself. This does not necessarily mean the ownership of the underlying real estate property. My business partner and I rent an extra apartment from a landlord for the exclusive use as an Airbnb -- we do this with our landlord's full support and knowlege of our Airbnb business; she has visited our listing and is a wonderful landlord; she is key in our success, and we in hers. So, even though I am a renter and a non-owner of the real estate poperty, my partner and I are the owners of the BnB operation therein. [HINT: It also really helps when your business partner is a tax attorney. ] [Grin]
A *HOST* is an owner, and has all of the usual responsibilties of a business owner (keeping guests happy, paying taxes, managing money, etc.). In short, the host has all the responsibility, and yes, all of the headaches, but then shares in all the benefits and risks of the venture. A host has her money where her mouth is and is ready to reap a nice reward, or lose her investment. (We hope for the former.)
In contrast, a *CO-HOST* is always a non-owner. While they may have many of the responsibilities shared with their host (from marketing, to meet 'n greet, to laundry, to restock), and even though they often get payment of some sort, the essential difference is that they do not share in the final profits, and they are not at-risk for the losses of the venture beyond their limited scope.
That part is key from a tax perspective. With minimal or no direct investment in the startup of the listing, co-hosts are essentially either CONTRACTORS, EMPLOYEES (see note below), VOLUNTEER HELPERS, or in some rare cases OUTSIDE THIRD PARTY FIRMS who perform some of rental functions. In fact, it is the very lack of the at-risk status for losses, the lack of contribution of capital, and the lack of a right to keep the final profits which makes them non-owners by definition.
And as co-hosts are non-owners, the tax reporting from the owner-host's perspective is quite minimal (Typically it's just single dollar figure on Form 1099-MISC) or even none at all (in the case of a corporate third-party co-host).
That is all the host has to do. File 1099 (and the 1096 with it) and mail it. 20 minutes once a year. Done.
Of course, the co-host must report their own income and pay tax thereon as all of us must do. They would use the tax form appropriate for themselves (1040 for US resident Individals, 1041 for Trusts, 1120 for corporations, 1065 for partnerships, and so on). But this would be the exclusive privilege and responsiblity of the co-host. NOT THE HOST.
There is the special case of an employee who is the direct employee of the host. Not a cleaning company employee.....they are a contractor. I am talking about a full employee of the host. This relatiohship brings much more complex rules. In this case, if the purported "co-host" is a bona fide employee, in that case, I would argue they are not a co-host at all. They likely have agency of the host, and are thus simply working while standing in the shoes of the host. The employer/host then likely has has a great deal of control and direction as to the work, and can theoretically hire or fire in accord with the laws in their state. Obviously, this is complex legal and tax and accounting topic too big for this venue, but I believe that direct employees of the host are also just "hosts", albeit hosts-by-proxy or agents of the host. Like all employers, a host would still have all the routine payroll tax, wage-hour, and other employer responsilities for employees, regardless of what the worker's job entails. That comes with being an employer. But the fact that the bona fide employee helps with hosting duties does not change the tax at all. And it does not make them a co-host.
Whatever they do, and however they do it, the co-host's taxes would have no effect whatsoever on the tax liability of their host, and the tax reporting of the host would be -- at most -- limited to a 1099-series form, if even that.
So a co-host is not a property owner. As such, there is no risk of a co-host making a tax mess for the host at all...just that one simple form 1099.
Hope that clarifies.