House and Senate Rental Bills Include Funding for Cape & Islands Water Projects

HYANNIS – Both the House and Senate have passed legislation regulating short-term rentals, including those made through online services like AirBnB.

The versions, which differ on how much taxes would be charged to renters, both include language which would fund the Cape Cod and Islands Water Protection Fund to help local towns with water quality improvement projects.

The fund would be supported through an extra 2.75 percent tax on short-term rentals in Barnstable, Dukes and Natucket Counties.

The Senate bill would impose existing state hotel taxes on short-term rentals and allow communities to impose additional local excise taxes if they want. The state hotel tax is 5.7 percent.

The House version is a tiered system that would impose a 4 percent state tax on rentals by individuals who offer no more than two rooms for rent. Short-term rentals made through a professional property manager or investor host would be taxed at 5.7 percent and 8 percent, respectively.

The House and Senate will now reconcile before a final version is sent to Governor Baker.

Material from the Associated Press was used in this article.

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