SENATE APPROVES REGULATION AND TAXING OF SHORT-TERM RENTALS

By Bob Katzen

The House 119-30, Senate 30-8, approved and sent to the governor a bill that extends the state’s current 5.7 percent hotel and motel tax and up to a 6 percent 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.

The measure also allows local cities and towns to impose a local impact fee of up to 3 percent on operators who rent out two or more professionally-managed short-term rental units within a municipality.

Other provisions create a central state registry of short-term rentals and require that a city or town dedicate no less than 35 percent of revenue generated from the new local option fee to either affordable housing or local infrastructure needs.

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

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

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.

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