SENATE APPROVES TO TAX SHORT-TERM RENTALS

By Bob Katzen

Senate 31-6, approved a bill that extends the state’s current 5.7 percent hotel and motel tax and the local option room occupancy tax to short-term rentals offered by Airbnb, HomeAway and VRBO while leaving the regulation of these rentals including registration, licensing and inspections up to local cities and towns.

Estimates are that the state will reap $34.5 million from the new taxes and local communities which impose the optional local tax will receive some $25.5 million.

Supporters said the bill strikes a balance and levels the playing field between currently untaxed and unregulated short-term rentals and hotels and motels that are currently regulated and taxed.

“The short-term rental economy is the latest example of a rapidly growing, technology-driven industry that is changing the way business is run in the commonwealth,” said Sen. Michael Rodrigues (D-Westport). “In addition to leveling the playing field in the lodging industry, this legislation ensures each city and town maintains local control, and balances innovative opportunities for the community with the need to regulate and permit safe, secure, and reliable transient accommodations.”

Opponents said the bill is simply another example of an anti-business, unwarranted tax and overregulation by the state.

“[This] is an example of the government regulating the use of private properties,” said Sen. Dean Tran (R-Fitchburg). “It’s an opportunity to institute a new tax. It was very unfortunate that an amendment requesting 25 percent of the collection goes to funding our schools failed. Your right to rent a room in your home, short term, should not be subject to regulations adhered to by hotels, motels and other big entities.”

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