AirBNB taxes, regulation in new House bill

Short-term rentals such as Airbnb units would be regulated more like hotels, taxed and subject to inspections, insurance requirements, and registration with the state, under legislation due for introduction Monday by a House leader. 

The bill calls for significantly more taxation and regulation than separate plans previously backed by Governor Charlie Baker and the state Senate. It would create three categories of hosts, based on how frequently they rent out their units, and tax them at different rates, according to a copy of the measure obtained by the Globe.

The bill’s author, state Representative Aaron Michlewitz of the North End, estimated it would generate around $50 million in revenue, and said the regulations were still shy of those applied to the hotel industry.

Under the legislation, “residential” hosts, for whom the units must be their primary residences, could not rent for more than 60 days per year and would face a 4 percent state tax rate, with cities and towns able to levy local taxes up to 5 percent.

“Commercial” hosts, who rent out multiple units, would pay 8 percent to the state, with municipalities able to impose their own taxes up to 10 percent. 

Business entities or people who use a rental management system and rent out units for five nights or more would face a 5.7 percent state tax and local taxes up to 6 percent. 

Michlewitz said he sought to address the differing imperatives facing private homeowners and corporate entities with a large number of properties.

Under Baker’s “Airbnb tax,” only those who rent out rooms for 150 days or more a year would face taxes, with a 5.7 percent rate and local taxes up to 6 percent. Casual users and those who rent out vacation homes occasionally would go untaxed. 

The Senate last year included a short-term rental tax in its economic development bill to help offset a boost in the earned-income tax credit. 

The new House measure also requires annual inspections for health and safety code violations and homeowner’s insurance of at least $1 million per unit per occurrence, and that hosts notify insurers that they are renting out their units.

All short-term rentals would need to be registered with the state, with that information then made publicly available, with the host’s personal information remaining confidential. 

Local governments would receive their own regulatory powers under the bill. They could restrict short-term rentals to only the “residential occupant” class and set a limit on how many days per year units could be rented. Cities and towns could also require commercial and business class hosts to obtain business licenses.

Michlewitz filed what he called “a conversation starter” two years ago after short-term rentals began growing in popularity in his district, which also includes Chinatown, Beacon Hill, the South End, and Bay Village. 

“As I started to do more investigation, it became clear that this industry was something related not just to downtown Boston or my district, but to the entire Commonwealth, and that we would want to set some guidelines around it,” Michlewitz said Monday, calling the new bill “a more mature version” of the earlier iteration. 

The bill marks Beacon Hill’s latest effort to catch up with technology-fueled business advances. Baker signed legislation last year regulating ride-for-hire firms like Uber and Lyft and a bill regulating fantasy sports companies like DraftKings.

Rebecca Rutenberg