Governor returns short-term rental bill to Legislature with amendments

Gov. Charlie Baker has returned legislation to tax and regulate short-term rentals, such as Airbnb, to the Legislature with proposed amendments.

The bill (H. 4841) was sent to the governor on July 30, just before formal legislative sessions ended for the year. Any attempt now to send the bill back to the governor – changed or unchanged – would effectively require unanimous consent under the rules governing votes at informal sessions.

According to the State House News Service, the changes proposed by Gov. Baker include exempting homeowners that rent units for less than two weeks per year, and limiting the amount of information made available through a new public registry of short-term rental housing units.

View Gov. Baker’s veto message to the Legislature (117K PDF)

H. 4841, a compromise reached by House and Senate negotiators, would extend the existing room occupancy excise under Chapter 64G – which applies to hotels, bed and breakfast establishments and similar rentals – to newly defined short-term rentals that are not currently taxed, including rentals through web-based companies such as Airbnb.

These new types of rentals would be subject to the state’s 5.7 percent room occupancy excise and a local-option excise of up to 6 percent.

The bill would also allow cities and towns, by vote of town meeting or city or town council, to impose a community impact fee on “professionally managed” rentals and certain multi-family units.

The legislation would impose an additional 2.75 percent room occupancy excise in towns on Cape Cod and the Islands to help pay for water pollution abatement projects in the region. It would also grant authority to cities and towns to regulate short-term rental operators through local ordinances and bylaws.