MA room rental tax expands in July

Starting in July of 2019, the law that regulates and taxes room rentals in Massachusetts, including short-term rentals, is expanding.

The law defines short-term rentals, outlines related registration, liability, and exemption rules and sets rates for state and local occupancy and excise taxes on these properties. Although the legislation has broad reaching impact for any rentals for a period of 31 days or less, it is targeted at those renting property through Airbnb, VRBO or similar hosting platforms.

The law, which requires owners to list their property on the state’s short-term rental registry, also outlines two levels of occupancy taxes charged on the total amount of rent paid: a state occupancy tax of 5.7% plus additional local option room occupancy excise taxes. The new law also mandates that owners maintain $1M in liability insurance coverage for each short-term rental property. Properties rented for fewer than 14 days are exempt from the tax charge, but still subject to the insurance and registration changes.

Please click here to learn more or contact us to discuss your compliance obligations in more detail.