It has just been announced that Governor Charlie Baker’s budget proposal for fiscal 2018 will include a 5.7 % room occupancy tax for any individual or business that provides short-term rental accommodations – but only for those who rent for 150 days or more per year. This would essentially exempt most seasonal Cape and Islands homes that rent from June through September.
You may recall that last August, a proposal to tax all short-term rentals cleared the state senate. It was eventually deleted from the economic development package, however, when Baker indicated that he would not support any tax measure that would extend to small bed and breakfasts and summer vacation rentals on the Cape and Islands.
This new tax is ultimately aimed at short-term rentals in urban areas such as Boston and surrounding cities. The concern is that property owners there are turning residential units into year-round, short-term rentals, thereby depleting the number of long-term rental units. One official noted that the new tax would “apply to people who are basically running a hotel.”
The bill would authorize the Department of Revenue to establish a working platform with companies like Airbnb that act as an intermediary between renters and property owners. Airbnb could begin collecting taxes as early as July 1, 2017.
This is all the information we have at this time, and we will keep you apprised of the situation as events unfold.