State Misses Out On Tax Revenue from $40M in Summer Rentals


With the fate of an Airbnb taxation bill still in limbo, new data from the online home and apartment rental website reveals that Massachusetts may have left at least $2.28 million in tax revenue on the table this summer season from rentals just on the Cape and Islands.

Airbnb on Wednesday said homeowners in Barnstable, Dukes and Nantucket counties earned $40 million from renting out their homes between Memorial Day and Labor Day this year, up 38 percent from the summer of 2017.

If the 5.7 percent hotel tax had been applied to those rentals, the state would have taken in almost $2.3 million. Lawmakers on Beacon Hill have been trying for years to develop a system to tax and regulate short-term rentals through sites like Airbnb.

The House and Senate each passed competing proposals this session, and entered into negotiations on a compromise on April 11 – well ahead of the summer rental season. Negotiators, however, did not reach a compromise until late July, and Gov. Charlie Baker returned the bill with an amendment that still has not been taken up.

The compromise bill would apply the state’s hotel lodging tax to all short-term rentals, while cities and towns would also be able to add an additional 6 percent local tax. Communities in the three counties referenced would have collected another 2.75 percent tax to deal with wastewater issues on the Cape, Martha’s Vineyard and Nantucket.

According to Airbnb, 131,000 guests stayed in units rented through its platform, up 37 percent from 2017. Provincetown, Barnstable, Falmouth, Dennis, Oak Bluffs and Nantucket were among the most popular destinations, and renters most frequently came from Boston, New York, Cambridge, Washington, D.C. and San Francisco.

Twenty-seven percent of those tourists to the Cape and Islands were families with at least one child under the age of 12, Airbnb said.



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State Misses Out On Tax Revenue from $40M in Summer Rentals

by State House News Service time to read: 1 min
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