Public Hearing Planned on Proposed Short-Term Rental Legislation

CCB MEDIA PHOTO
The sign at the Cape Cod Chamber of Commerce welcomes visitors.

HYANNIS – A public hearing is planned for today in Hyannis as state officials weigh the so-called “Airbnb tax.”

The short-term rental legislation would impose taxes on visitors using private rentals, an approach that has been on the rise in recent years with the popularity of online services such as Airbnb.

The hearing is scheduled for 3 to 6 p.m. at Barnstable Town Hall and will be hosted by the state’s Joint Committee on Financial Services, chaired by State Sen. Jamie Eldridge (D-Acton) and State Rep. Aaron Michlewitz (D-Boston)

Hotels and B-n-B’s have argued that the rise of room sharing sites have created an uneven playing field.

In Massachusetts, someone staying in a hotel, motel, or bed and breakfast is taxed 5.7 percent. Local communities have the option to add a 6 percent tax.

The proposed legislation calls for a 4 percent tax on residential rentals, with up to a 5 percent tax option available for cities and towns.

Airbnb Press Secretary Crystal Davis issued the following statement from the company on the bill:

““Airbnb fully supports the Senate’s budget which allows the collection and remittance of taxes from our host community. This is a major step forward in our efforts to partner with the Commonwealth on fair home sharing rules. We look forward to continuing working with state lawmakers to develop fair regulations that promote the economic opportunity of home sharing in every corner of the Bay State.”

Commercial rentals, units that are rented out for more than 60 days per year, would incur an 8 percent tax with a 10 percent local option.

Rentals that fall under business entities would result in a 5.7 percent tax, with up to a 6 percent local tax option.

The law would require that all units be registered with the state. The Department of Revenue would be tasked with maintaining a registry similar to their hotel room listing.

The proposal would require $1 million in insurance coverage for all units. Homeowners would have to notify their provider if a unit was being used as a short-term rental and insurers would be allowed to exclude coverage for those units.

The bill aims to provide a number of local options to regulate the rentals. Cities and towns would be able to limit hosts to renting out only their primary residence and impose a limit on the number of days that a host can rent out a unit.