State Legislature Passes Regulations, Taxes on Airbnb, Other Short Term Rentals

The following piece was provided by Andrew Bettinelli, Chief of Staff for State Sen. Will Brownsberger (D – Belmont) who represents Watertown:

The House and Senate have reached an agreement to regulate and tax short term rentals, like Airbnb. Perhaps most importantly, the bill preserves local control, giving cities and towns wide latitude to regulate short term rentals.

Preserving local control is critical because cities and towns across the Commonwealth have different concerns, and even within Boston, the impacts are different from neighborhood to neighborhood. By requiring registration of short term rental units, municipalities will be able to collect the data needed to better understand the impacts on different neighborhoods.

Town Mulling Over How to Handle Airbnb, Other Short-Term Rentals in Watertown

This bill would:

• Tax short-term rentals and accommodations rented through hosting platforms like Airbnb at the same uniform tax rate imposed on stays at traditional brick-and-mortar lodging accommodations like hotels/motels/bed & breakfast establishments. These taxes include: the room occupancy excise of 5.7%, the local option excise of up to 6%, and convention center financing fee of 2.75%, and will be assessed on short term rentals and accommodations rented through an intermediary/hosting platform.
• Maintain an exemption for owner-occupied bed & breakfast homes that rent out fewer than 4 bedrooms.
• Preserve local control and ensure cities or towns are empowered to regulate operators of short-term rentals.
  • Cities and towns may:
    • Regulate the existence or location of operators of short-term rentals.
    • Regulate the class of operators and number of local licenses or permits issued to persons operating accommodations, and the number of days a person may operate and rent out such accommodations in a calendar year.
    • Require health and safety inspections.
    • Require licensing or registration of operators.
    • Establish a reasonable fee to cover costs associated with the administration and enforcement of regulating operators and accommodations.
• Require operators of short-term rentals and hosting platforms to maintain appropriate levels of insurance coverage.
• Require operators of short-term rentals to register with the Department of Revenue to obtain a tax certificate.

A more detailed summary of the bill, prepared by Sen. Rodrigues’ office, can be seen here.