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Massachusetts slaps new tax on Airbnb hosts

By Mike Wheatley | January 3, 2019

Lawmakers in Massachusetts are trying to clamp down on short-term rental companies such as Airbnb with a new law designed to tax and regulate the industry.

A new bill, signed into law by Massachusetts Governor Charlie Baker this week, requires all rental hosts to register with the state government. In addition, each host must pay for insurance, and will have to pay tax at the same 5.7 percent rate as hotels in the state. However, those who only rent their homes for 14 nights or less per year will be exempted from this tax. Officials say the new tax could generate around $25 million a year in the state.

“Our administration has long supported leveling the playing field for short-term rental operators who use their properties as de facto hotels,” Baker said in a statement.

State officials hope to register every short-term rental in the state by September. The new rules will take effect from July 1.

Airbnb predictably has come out in opposition to the new bill, saying it’s “flawed”.

“Massachusetts has chosen a pathway here that nobody else in the country has chosen,” Andrew Kalloch, Airbnb’s head of public policy for Massachusetts, told The Boston Globe. “Sometimes first in the nation is bad because it means … what you have chosen to pass is a flawed measure.”

The bill also allows for individual cities and towns in Massachusetts to impose their own taxes on short term rentals of up to 6 percent. In addition, extra taxes will be levied on hosts that own multiple units.

Other cities, such as New York and San Francisco, have used short-term rental registries to regulate the industry. Massachusetts, however, is reportedly the first state to require all hosts to register.

Housing advocates have pushed for a registry so that people could see whether their neighbors were renting a house or apartment short-term. The new law will list the community and street name on the registry. It will not list specific addresses, but cities and towns can choose to list such information.

“This is a tremendous victory for municipal leaders,” said Paul Sacco, president and CEO of the Massachusetts Lodging Association. “By adopting a more level playing field between short-term rentals and traditional lodgers, lawmakers made great strides toward a more fair and sensible system.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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