AMHERST, Mass. (WWLP) – A new tax on short term rentals went into effect in Massachusetts Monday, just in time for the 4th of July holiday.
For bed and breakfasts and hotels, the state has long had an excise tax, but short term rentals like VRBO and Airbnb have been exempt from that tax, until Monday.
The owners of short term rentals now have to pay the 5.7 percent state excise tax on their room rates.
The same rate hotels, and bed and breakfasts like the Allen House Inn in Amherst said they’ve been paying for decades. Anne King of the Allen House Inn told 22News, the rates of Airbnb are much cheaper for customers.
“It’s been a lot cheaper for people to use Airbnb and they don’t have to pay the taxes, which are quite high,” said King.
All short term rentals will have to register with the state, and the new law also allows cities and towns to tack on a community impact fee of up to 3 percent on short term rentals.
While local hotel owners said the new tax will help level the costs of traditional inns versus short term rentals, one innkeeper said short term rentals have had a positive impact on communities and travelers alike.
Allen Zieminski told 22News that Airbnb has affected the hotel community for the better.
“I absolutely believe in it, and it’s helped our community,” Zieminski said. “We are affected by Airbnb, but I think in over 28 years, we’ve never dipped in our vacancy rate. We’re very fortunate that way.”
When the bill was signed into law back in January, an Airbnb spokesperson said they were proud of the community they had built in Massachusetts, but were upset with the final legislation that was passed, saying:
” 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.”Airbnb Spokesperson
And the only way to be exempt from the tax is if the room will be rented for no more than 14 days total in a calendar year.