Governor Baker signs AirBnb tax bill

Local impact expected to be significant.

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Owners of vacation rental homes, such as this one in Oak Bluffs, will be required to collect a tax on short-term vacation rentals. –MVT file photo

Friday afternoon, Gov. Charlie Baker signed into law a bill that seeks to tax and regulate short-term rentals like those offered at AirBnB and VRBO. 

The bill passed in July, but was halted by Gov. Baker. The bill will apply a 5.7 percent mandatory state tax on short-term rentals. There are many short-term rental properties on Martha’s Vineyard, inherent to the largely seasonal tourist population. An amendment to the bill will exempt homeowners who rent units for 14 days a year or fewer from having to collect the tax. Cities and towns can decide to levy an additional 6 percent local excise tax and a 3 percent community impact fee. The bill also includes a local option for towns to add a 2.75 percent tax on short-term rentals that would go toward a Cape Cod and Islands Water Protection Fund to create wastewater management systems to clean up nitrogen pollution. As part of the bill, there will be a public registry for all short-term rental housing units.

7 COMMENTS

  1. Gov. Baker was the last hope this wouldnt go into effect. Isnt marijuana sales going to be enough of a boost to tax revenues that short term rentals could have been left off the table?

    • Why should owners using AirBnB duck out on paying the taxes hotels and B n B owners have to pay. Silly to treat them differently. If you rent out your home then you’re in effect a business making money off of tourists. Time to pay your fair share.

      • The hotel tax should have been in place long before AirBnB even existed. However, not sure if towns are going to enact these “additional “ taxes 6%, 3%, and 2.75%. Seems like a huge increase when tacked on to 5.7%. Probably take some homes off the market and drive a lot of cash transactions around here.

  2. Many people (illegally) avoid paying tax by using cash. These transactions will be no different. Renters who pay in cash will avoid paying the tax and home owners who accept the cash will not declare it at all as rental income. God bless America.

  3. republican governor that I voted for and respect– but he is a republican— you know, that party that wants to keep government out of your personal life, unless you want to do something in the privacy of your own home, or want to control what happens inside your body.

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