Massachusetts House Bill Would Tax, Regulate Airbnb, Other Rentals

A bill Massachusetts lawmakers are considering would place taxes on short-term rentals, including those made available through online platforms such as Airbnb.

The legislation calls for a three-tiered state tax on short-term rentals and gives cities and towns the option of imposing further excise taxes.

The bill would impose a 4 percent state tax on rentals by an individual who offers no more than two rooms for rent.

Short-term rentals made through a professional property manager or an investor host would be taxed at 5.7 percent and 8 percent respectively. No excise would be imposed if the total amount of rent is less than $15 per day.

The bill also would let cities and towns impose their own local excise tax at a rate of up to 5 percent by a residential host, 6 percent by an investor host and 10 percent by a professionally managed host.

Communities that impose their own excise tax would be required to dedicate half of the taxes collected from professionally managed hosts for either local infrastructure projects or low- and moderate-income housing programs.

Airbnb has said it supports being taxed and last year urged lawmakers in Massachusetts to approve a proposal that would have required it and other online lodging services to pay the same taxes as traditional hotels and motels.

But Airbnb spokeswoman Crystal Davis said the bill goes too far.

"This proposal is onerous and overly burdensome for our host community, and the kind of legislation the hotel industry has promoted across the country to prevent middle class families from earning additional income,'' Davis said. "The commonwealth and its residents can only truly benefit from fair and reasonable short term rental rules."

Massachusetts Lodging Association President Paul Sacco dismissed Airbnb's criticism, saying it has "nothing to do with protecting middle class home sharing and everything to do with protecting the wealthy investor class hosts who have made it a big business to buy up scarce housing and convert it to illegal, unregulated and untaxed hotels at the expense of local residents and neighbors."

The bill also would let cities and towns place certain restrictions on short-term rentals, including limiting the number of days hosts may rent out residential units and requiring each residential unit offered for short-term rentals is the host's primary residence.

The bill would create a state registry of short-term rental properties.

Hosting platforms would also face new requirements under the bill including making sure that those offering rooms or houses have signed up with a new state registry.

Hosting platforms and hosts would also be barred from discriminating on the bases of race, sex, gender identity, ethnicity, sexual orientation, age, religion, disability or nationality.

Gov. Charlie Baker said he hadn't had a chance to read the full bill, but hopes legislation addressing the short-term rental industry makes it to his desk before the end of the legislative session.

"It's an important issue. I think it's a level playing field issue, and it's unfortunate that it hasn't happened already," Baker said.

The debate over services like Airbnb -- which have been criticized for essentially turning apartments into hotel rooms, putting upward pressure on housing costs, and driving out longer-term tenants who can't afford rising rents -- has raged for years in major cities like Boston.

Airbnb has said it is not to blame for spiking housing costs.

The online platforms caused enough concern in Cambridge that the city council last year approved new regulations requiring people offering short-term rentals to live in the same building and undergo an inspection once every five years.

The bill could come before the Massachusetts House as early as Wednesday.