News

Baker Revives Airbnb Rental Tax Proposal

Airbnb users who rent out private rooms for five months a year or longer would have to collect hotel taxes under a proposal detailed Thursday by Governor Charlie Baker.

The governor’s plan, to be included with his formal budget proposal later this month, would target a small group of landlords who operate high-volume rental businesses on Airbnb and similar sites, which include HomeAway, owned by Expedia, and FlipKey, owned by TripAdvisor.

Baker estimates the tax would raise $12 million for the state in the 2018 fiscal year by applying hotel taxes to home-rental landlords operating “a de facto business.” But the proposal would not subject those rental business to additional regulations, such as for health and safety codes, as pushed by the state’s hotel industry.

Airbnb has repeatedly asked lawmakers to assess hotel taxes on its users, saying it wants to pay its fair share to state and local governments. But the San Francisco-based company also has said any regulations should distinguish between professional rental operators and the large number of people who use the service occasionally to make a few extra bucks.

In July, the state Legislature considered a larger tax proposal from Senate President Stan Rosenberg, who advocated raising about $20 million for the state’s earned income tax credit by taxing all short-term rentals of 31 days or less.

That effort died after Baker declared his opposition, in part because of its effect on owners of vacation homes on Cape Cod and the islands. Rosenberg did not reply to a request for comment Thursday.

State and local officials around the country are increasingly considering new rules on short-term home rentals in response to the growing popularity of Airbnb, which now boasts more than 3 million listings worldwide.

Some of that legal scrutiny is driven by worries that home rentals are competing unfairly with hotels and traditional bed-and-breakfast operations, undercutting them on price by not collecting taxes.

But officials, including Massachusetts legislators and city council members in Boston and Cambridge, are also concerned that short-term rentals are prompting investors to convert traditional housing into de facto hotels.

Under Baker’s plan, anyone who rents out private rooms for 150 days or more in a calendar year would have to begin collecting state and local hotel taxes in the following year. The state levy is 5.7 percent, while cities and towns add charges of up to 6 percent.

That would leave untouched a large group of casual users and vacation-home owners who rent out their residences for a few days or months each year.

Figures provided by Airbnb to the Globe show that the company makes a large slice of its money in the Boston area from a small number of high-volume hosts.

Property owners who rented out homes for six months or more in a recent 12-month period made up about 10 percent of Airbnb’s user base in Boston, Cambridge, and Somerville. But that small group, fewer than 800 hosts, accounted for more than a third of Airbnb’s revenue in the area.

The Massachusetts Lodging Association has argued that Airbnb and similar services are competing unfairly with established hotels and should have to meet some minimum standards, such as maintaining fire safety equipment and complying with federal rules for accommodating people with disabilities.

Paul Sacco, the lodging association’s chief executive, praised Baker for keeping the issue on the Legislature’s agenda. But he said the governor’s proposal could go further, both by imposing regulations and assessing taxes after 30 days of rentals.

“If you’re renting for 30 nights, you’re in business. Whether you’re renting one room or 10 rooms, you’re in business,” Sacco said.

House Speaker Robert DeLeo has also said he favors some form of regulation for the short-term private rental industry. DeLeo declined to comment on Baker’s proposal Thursday.