Battle lines drawn over short-term rental tax

 

 

HYANNIS — Lawmakers considering a short-term rental tax took their show on the road Monday, visiting Barnstable Town Hall to gauge public sentiment on the proposal.

“We’re here to listen,” said state Rep. Aaron Michlewitz, D-Boston, co-chairman of the Joint Committee on Financial Services.

 They got an earful.

Nearly 200 people crowded into the second-floor conference room, with more than 50 taking the microphone to offer impassioned testimony. By the end of the 3½-hour meeting, it became clear that owners of rental homes were against the tax. Hotel, motel, and bed and breakfast operators were pushing for the measure, which they said would “level the playing field.”

The tax would affect people who rent homes, apartments or rooms through online services such as Airbnb, HomeAway or Vacation Rental by Owner for less than 30 consecutive days. The state tax would be levied at 5.7 percent with a local option to add up to an additional 6 percent, a policy on par with the current Massachusetts state hotels tax.

The tax, which potentially could go as high as 11.7 percent, would be added on top of fees already charged by the online rental platforms. Airbnb, for example, charges a 6 to 12 percent guest services fee when a reservation is made.

In addition, the tax would require the rental units be regulated to meet health and safety standards, and adequate liability insurance be carried on the properties.

On Cape Cod, a proposal has been floated to use proceeds from the tax to help fund the region’s multibillion-dollar wastewater cleanup plans.

The tax would bring fairness and equity to the rental market, while providing tax relief to local communities that absorb the costs of extra services during peak tourist periods, said state Rep. Sarah Peake, D-Provincetown.

 Many of the speakers opposing the tax argued they were not renting their properties to get wealthy, but were doing so just to pay property taxes or a mortgage. In some cases, the owners moved out of their homes in the summer to make room for renters — one even saying she moves into an Airstream trailer.

Chris Kinely, of Hyannis, said his elderly mother relies on renters at her Chatham home in order to stay on the Cape. The extra tax would eventually end up coming out of her pocket, he said.

“11.7 percent (tax) is overwhelming. Think of the small guy,” he said to applause, asking why there should be a level playing field with the Chatham Bars Inn and his mother’s house.

 Luke Chapman, of Del Mar Vacations in Orleans, called the tax “regressive,” since it would have no impact on someone who owns a $10 million home in Osterville and only uses it in the summer, but would affect a homeowner trying to make ends meet.

The tax is “a done deal,” said Tina Carey, of Centerville.

“It’s a scam,” she said when she learned the tax would likely not go to a vote at the ballot box.

Many opponents of the tax said there is price sensitivity in the rental market and an extra tax could set off an adverse domino effect on the Cape’s economy.

 Wendy Northcross, CEO of the Cape Cod Chamber of Commerce, spoke in favor of the tax, stressing the need for fairness. She emphasized that a portion of the tax would be spent on the Cape — where half of the second homes in the state are located — to deal with water quality problems so the area remains attractive for tourism.

“We’re a cash cow for Massachusetts, but you have to keep feeding the cow,” she said.

Edward McManus, the Harwich delegate to the Barnstable County Assembly of Delegates, read a letter of support for the tax from the 91 elected officials of the Cape Cod and the Islands Selectman and Councilor Associations.

Woods Hole innkeeper Beth Colt owns weekly rentals in the village.

“I think leveling the playing field would be appropriate,” she said, adding that fees paid by renters to the online rental companies don’t stay local, but go out of state to their corporate headquarters.

Monday marked the second of three public hearings on the subject. A hearing was held last week in the Berkshires, and a final hearing is scheduled for the Statehouse on June 27.

 

 

This Article originally appeared in The Cape Cod Times

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