| Gov. Charlie Baker is considering returning the bill sent to him Monday by the Legislature taxing and regulating short-term housing rentals with an amendment to exempt from taxation owners that rent out their homes or apartments for less than two weeks a year, according sources familiar with ongoing talks.
The governor’s team discussed the idea with legislative leaders Monday evening just hours after a compromise bill to regulate and tax the short-term rental market cleared the House and Senate. While the governor has concerns about the bill, his team is also cognizant that any amendment he files after Tuesday could doom the entire bill.
The conference committee led by Rep. Aaron Michlewitz and Sen. Michael Rodrigues struck a deal Sunday night to tax short-term rentals through websites like Airbnb at the same 5.7 percent lodging tax applied to hotel and motel room rentals.
Cities and towns would have the option to levy an additional 6 percent tax on all short-term rental units, or up to 9 percent if the owner controls two or more units in the same municipality. Short-term rental units would also have to be registered by owners with the state.
While Baker has not been opposed to taxing short-term rentals, his focus has always been on property owners who are operating de facto hotels through Airbnb and other portals by buying up properties and renting them full-time.
He filed his own legislation this session that would have applied the state lodging tax to units rented more than 150 days a year.
According to sources close to the ongoing talks between the Legislature and the administration, Baker is considering an amendment that would exempt from new taxes any units that are rented for less than 14 days per year, but has not yet settled on that course of action.
The compromise Airbnb bill would reduce that window to 31 days, and the administration conveyed to lawmakers that they are concerned that not only could the change reduce the amount of lodging tax revenue coming to the state, but it might also violate the bond terms for the Boston Convention and Exhibition Center.
