Governor Charlie Baker has signed a bill regulating short-term rentals, like Airbnb.
Baker signed the new law at the end of December. It subjects short-term rentals to the same 5.7 percent state lodging tax that hotels and traditional bed and breakfasts have to pay. The bill also allows cities and town to impose an additional six-percent tax on rentals if they want.
Before this new law, short-term rental companies like Airbnb and vacation rental by the owner were able to offer rooms to people without charging those additional fees.
Skipping those taxes allowed them to offer rooms at considerably cheaper prices than traditional hotels.
The law also makes Massachusetts the first state to require people to register their short-term rentals with the state.
One local bed and breakfast owner said the legislation helps level the playing field for traditional hotels.
“I know there are houses around here that are just big, that they’ve fixed up just enough that are livable that have ten to twelve rooms, and then they just rent them out for forty bucks. It’s hard for us just to scrape by just trying to compete with the local hotels that are doing the same thing,” said Ronald Gagne, co-owner of Naomi’s Inn.
However Airbnb has called the new legislation “flawed” and a spokesman for the company said in a statement,
“We’re proud of the community we’ve built in Massachusetts, with over 1.2 million travelers using Airbnb to visit the Commonwealth and nearly 2 million Bay Staters using Airbnb to travel at home and abroad in 2018 alone. While we are deeply disappointed in the flawed bill that emerged from Beacon Hill during the lame duck session, we will continue the fight to protect our community and the economic engine of short-term rentals for hosts, guests, and local small businesses.”
The new law won’t impact people who rent out their homes for fewer than 14 days a year. The law also stipulates that for short-term rentals, the convention center financing fee, a 2.75 percent tax on hotel rooms in certain cities, including Springfield, West Springfield and Chicopee, will go half to the state’s general fund, and half to the city or town the short term rental is located in.
The law is set to go into effect in July.