| New commuter rail lines. Additional treatment beds for opioid addiction. Affordable pre-kindergarten.
The list of projects Massachusetts leaders would spend money on if they had it are endless, and yet available resources are finite, as officials have noted during recent rounds of budget tightening efforts. But what if there was $18.3 million in untapped revenues waiting to be accessed?
It’s not a fortune, but Airbnb, the online platform that allows property owners to rent their homes, says it’s money that the company is waiting to help the state and cities and towns collect.
“It’s a way to demonstrate to the commonwealth and the leaders of the commonwealth that we’re good corporate citizens,” said Will Burns, Airbnb’s public policy director for Massachusetts.
Massachusetts became the last New England state that still does not permit Airbnb to collect and remit room occupancy taxes on behalf of its users as of Nov. 1. Rhode Island was the first state in the region to make the leap in August 2015, followed by Vermont and Connecticut in 2016, and finally Maine and New Hampshire this year.
In tax figures shared with the News Service, Airbnb estimates that it could have collected $18.3 million in state and local room taxes between Oct. 1, 2016, through Sept. 30, 2017, based on guest arrivals during that period. The estimate assumes a 5.7 percent state room occupancy tax rate and local rates ranging from zero to 6 percent.
The total also amounts to about $3 million more than the prior year when Airbnb estimated that $15 million in taxes were being left on the table.
Over 290,000 renters in Boston would have paid $9.6 million in state and local taxes over the typical 3.3 nights stay, while over 95,000 Airbnb guests in Cambridge would have paid $3.3 million. If state and local taxes had been collected elsewhere in Massachusetts, over 860,000 short-term renters would have chipped in another $6.9 million.
Burns said in states that have started making short-term renters pay room taxes, the company has not seen a drop in usage or a gravitation of travelers back to more traditional hotels and inns. “I think the way that it’s done is it’s just included in the price of renting the listing and there’s still a value proposition even when we apply the tax for those who want to live like a local,” he said.
It’s not that politicians don’t want the money. They just haven’t agreed yet how to tap into that market.
Gov. Charlie Baker and House and Senate leaders have all proposed different strategies for taxing short-term rentals. Baker put a plan into his budget this year that would have taxed short term rentals at the same 5.7 percent rate the state charges in hotels for people who rent their houses or apartments more than 150 days a year.
The Senate also put a provision into its budget to tax short-term rentals no matter how many days the units are rented, but that effort did not survive negotiations with the House.
