The Massachusetts Short Term Rental Occupancy Tax now applies to all short term rentals, including those privately-owned individual units that are rented daily and weekly on hosting platforms like Airbnb, HomeAway, VRBO, Tripping.com, HomeToGo, etc.
A short term rental is defined as any room or unit that is rented for a period of less than 31 days. It includes a room rented in your house, your primary residence or a second home.
The tax applies to all rental occupancies that commence on or after July 1, 2019 and for which contracts with occupants were entered into on or after January 1, 2019. The total tax is 14.45% (which includes 5.7% state tax, 6.0% local tax, and 2.75% Cape Cod and Islands Water Pollution Fund Tax) of the total amount of the rent. Additional information is available at https://www.mass.gov/service-details/room-occupancy-excise-tax.
Owners who rent short term need to register with the State Department of Revenue (DOR) to pay the tax. DOR will issue guidance shortly on how to sign up and pay the tax. Information available at www.mass.gov/orgs/massachusetts-department-of-revenue or (800) 392-6089. Most hosting platforms will collect and handle the tax with the payment.
The law also requires owners to notify their insurer and maintain liability insurance of not less than $1,000,000.