MA Senate Approves Bill To Tax Short Term Rentals Like Airbnb

BEACON, HILL — Despite some pushback about how the compromise bill could impact small mom and pop rentals Monday, the Senate passed a bill that would tax short-term housing units rented through websites such as Airbnb at almost 17.5 percent in cities like Boston.

If the governor signs the bill, Massachusetts would become the first state to maintain a registry of such rentals.

State officials have been trying to to regulate the short-term rental market that recently exploded with the advent of Airbnb, and impacting the hotel industry. Housing advocates say the impact the short-term rental boom has also affected communities where units have been turned into investment properties, crowding out residents looking for affordable options to rent or buy.

Under a compromise (H 4841) on the second to last day for major business to get done for the year, short-term rentals would be subject to the same 5.7 percent lodging tax applied to hotel and motel room rentals. Cities and towns would have the option to add another 6 percent tax on all short-term rental units, or up to 9 percent if the owner controls two or more units in the same municipality, State House News reported.

On Cape Cod and The Islands, the bill would also permit an additional tax of 2.75 for help deal with Barnstable County's wastewater issues. In Boston, Cambridge, Worcester, Springfield, West Springfield and Chicopee, the 2.75 percent hotel room tax would also be applied, the News Service reported earlier.

The proposed taxes would take effect in January 2019 for all units booked after the first of the year.

Whoever receives payment from the consumer would be the one being taxed.

The legislation also includes anti-discrimination language to prevent rental units owners from denying access to someone based on race, gender, ethnicity or other reason.

Airbnb criticized the original bill as "onerous and overly burdensome," while the hotel industry did not like the original Senate approach because they said short-term rental should have to comply with many of the health, safety and consumer protections they were required to follow, State House News Service reported.

State House News Service reporting was used in this article.

Photo by Jenna Fisher/Patch