BOSTON (AP) — Massachusetts property owners who rent out rooms for more than 150 days a year using online lodging services like Airbnb would begin paying the state’s hotel tax under a proposal by Republican Gov. Charlie Baker released Thursday.
The decision to update the state’s existing room occupancy tax rate of 5.7 percent is aimed at those who use online lodging services to essentially transform their homes or property into virtual hotels or motels.
Legislative leaders including Democratic Senate President Stan Rosenberg have voiced support for taxing online lodging services.
Airbnb spokeswoman Crystal Davis said in a statement that the San Francisco-based company is pleased Baker is moving ahead with a plan to let the company collect and pay taxes in Massachusetts.
“Over 592,000 Airbnb guests visited Massachusetts last year and we look forward to working with state lawmakers this year on home sharing rules that are fair, sensible and progressive for all residents,” Davis wrote.
Baker will file the plan as part of his state budget plan for the 2018 fiscal year that begins July 1. The proposal would need to be approved by state lawmakers and signed by Baker before becoming law.
The plan will allow companies like Airbnb to collect and pay the taxes rather than requiring each individual property owner renting out a room through the website to collect the taxes themselves.
Administration officials estimate that applying the hotel tax to online rentals could bring in an extra $12 million in tax revenue in the 2018 fiscal year.
The proposal resolves an issue that first surfaced last year, when Baker initially indicated he would support applying the hotel tax to online lodging services, then walked back his support, saying he didn’t want to apply the tax to homeowners who might rent out rooms or their entire house for short periods of time during the year.
To determine who qualifies under the 150-day threshold, the legislation would count each room that is made available as a single unit, count all properties under common ownership, but specify that a private, owner-occupied house counts as one unit.
The obligation to start collecting and paying taxes would begin Jan. 1, 2018.
The proposal must still be approved by state lawmakers and signed by Baker before becoming law.
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