MMA testifies on several bills before Revenue Committee

On May 12, the MMA presented testimony to the Legislature’s Joint Committee on Revenue on a number of bills with significant local tax implications.

Two of the bills heard by the committee were part of the MMA’s legislative package for this session, including one to allow municipalities to create a payments-in-lieu-of-taxation program for nonprofits and one to allow municipalities to include advertisements in tax bills as a way to generate revenue.

The PILOT bill, filed by Rep. Stephen Kulik and Sen. William Brownsberger, would allow a municipality, upon acceptance of the local-option law, to implement a program for nonprofits to make an annual PILOT payment to the municipality in which they are located. The payment would be equivalent to 25 percent of the amount the organization would have been assessed on real and personal property if it were not exempt from taxation.

The municipality would craft an ordinance or bylaw to allow for PILOT agreements between the municipality and nonprofits. The local ordinance or bylaw could include exemptions or consideration of community benefits that reduce the amount of the PILOT paid to the municipality.

The municipal tax bill legislation, filed by Rep. Shawn Dooley, would allow a city or town, upon approval by the mayor or board of selectman, to include non-political advertisements with local tax bills that are mailed or sent electronically. The ads would create a new non-tax revenue option for municipalities.

The MMA also testified in support of legislation to close room occupancy excise tax loopholes.

Online room resellers such as Orbitz or Travelocity currently remit occupancy taxes on the wholesale room rate that the reseller paid to a hotel, rather than the retail rate that is paid by the consumer. Several bills have been filed to ensure that the rooms tax is based on the retail cost of the room.

Another rooms tax loophole concerns short-term rentals in private homes. This is an increasingly common practice, using websites such as Airbnb that facilitate transactions between consumers and homeowners with rooms to rent. Currently, these rooms are not subject to the rooms tax.

The MMA supported several bills to modernize the room occupancy excise tax law to ensure that this growing segment of the marketplace is subject to taxation.