Massachusetts lawmakers have given final approval to a bill that would tax and regulate short-term rentals including those offered by Airbnb and other online platforms.
The compromise bill that was announced over the weekend was approved Monday in the House and Senate.
It calls for extending the state’s current 5.7 percent hotel tax to most short-term rentals. Municipalities would have the option of tacking on an additional 6 percent lodging tax, and another 3 percent if an owner rents out two or more units in the same community.
Included in the legislation is an amendment establishing the Cape Cod and the Islands Water Protection Fund. State Senator Julian Cyr of Truro led the effort in the Senate while Provincetown State Rep, Sarah Peake, spearheaded the CIWPF in the House.
As the result of a 2011 lawsuit filed by the Conservation Law Foundation, Cape Cod towns are legally mandated to develop and build wastewater management systems to clean up nitrogen pollution. With an estimated price tag of $4 billion to clean up and maintain good water quality on the Cape, the CIWPF was developed for Barnstable, Dukes, and Nantucket counties to provide funding assistance for critical municipal or regional water pollution abatement projects. The CIWPF will be funded by an additional 2.75% occupancy excise tax applied equally to both short-term rental and traditional lodging accommodations in the region.