A Tax on Airbnb May Be Coming Soon after a Last-Minute Deal

Photo via iStock.com/GoodLifeStudio

After a last-minute deal struck at the State House over the weekend, the long-discussed tax on Airbnb may soon arrive in Massachusetts.

If Gov. Charlie Baker adds his signature to it, the new law would tax short-term rental units like the ones available on Airbnb at the same rate charged for booking standard hotel rooms: 5.7 percent. It would also allow cities and towns to tack on an additional 6 percent tax, or up to 9 percent if the owner of the unit also owns at least one other unit in the municipality, the State House News Service reports. In Boston, Cambridge, Worcester, Springfield, West Springfield, and Chicopee, the units would also be subject to the 2.75 hotel tax, which fuels the Boston Convention and Exhibition Center. The new taxes would take effect January, 2019.

The state’s hotel lobby, which has argued that short-term rentals have unfairly skirted paying their fare share of taxes is, obviously, thrilled.”The conference committee did an outstanding job of producing a plan that is quite fair to all concerned,” the Mass. Lodging Association said in a statement. “It goes a long way toward leveling the playing field for all lodging businesses while maintaining a welcoming environment for new home-sharing platforms. After several years working to find the right balance, we urge the legislature to pass, and the governor to sign, this important bill.”

Such a tax would not only apply to Airbnb rentals, and would levy new taxes on, for example, those who rent out homes on the Cape and Islands. In addition to the hotel tax, those homes would be subject to a 2.75 percent surcharge to help with waste water issues in Barnstable County.

It’s shaping up to be a new era for Airbnb, which has exploded in popularity over the past few years. The move comes not long after Boston’s City Council voted to impose new restrictions on short-term rentals that include new fees for listing units and a ban on “investor-owned” units, wherein a property is owned for the sole purpose of listing it on sites like Airbnb, rather than providing housing for Bostonians.

Mayor Marty Walsh celebrated the deal on Monday, saying in a tweet that the law would complement  the new city regulations and help “protect long-term housing in our neighborhoods.”

I applaud @SpeakerDeLeo, @KarenSpilka, @RepMichlewitz, & @SenRodrigues for their leadership in crafting a framework for short-term rentals. Their statewide approach & tax structure complements the @CityOfBoston law. Together, we will protect long-term housing in our neighborhoods

— Mayor Marty Walsh (@marty_walsh) July 30, 2018