In an effort to regulate and benefit from the short-term rental market, Massachusetts State lawmakers have passed excise tax bills on short-term rental properties that may go into effect by next summer. The bills are currently in a conference committee to reconcile the differences between the senate and the house versions before heading to the governor for signature. The bill would allow the Department of Revenue to create a database of short-term rentals, impose a tax between 4 and 8%, and allow municipalities and towns to impose local excise taxes as well. Nantucket will decide whether or not to impose local taxes on short term rentals and what structure to implement. The current room occupancy tax, charged when staying in a hotel or inn on Nantucket, is 11.7% of which 5% goes to the Commonwealth and 6.7% is the local room tax.
In both bills, any platform (Airbnb, Home Away, VRBO) or entity (real estate offices and home owners) will be responsible for collecting and remitting these new taxes to the state.
The aim of the room-occupancy tax is to bring in an estimated 20-35 million dollars in revenue to the state and to level the playing field for hotels, motels and inns who are already required to charge the tax (and have to be licensed, have health and safety features and be inspected).
Stay tuned!