BOSTON — The new tax on short-term rentals in Massachusetts kicked in on Monday, part of a 2018 law regulating lodging offered through platforms like Airbnb.
The law, which Gov. Charlie Baker signed in December, extends state and local room occupancy taxes, like those levied on hotel stays, to units rented on a short-term basis, or for 31 or fewer consecutive days. While the new taxes are likely to directly affect consumer prices, units rented for 14 days or fewer in a calendar year are exempt, and the tax is not required to be collected if the total rent is less than $15 per day.
The first return and payment for short-term rentals will be due on Aug. 20, and after that returns will be due on the 20th day of each month, according to the Department of Revenue.
Short-term rental operators must register with the department, which has prepared video tutorials on registration and other aspects of the law.
As of Monday, a one-bedroom Beacon Hill condo, renting for $158 a night plus cleaning and service fees on Airbnb, now incurs a $55 tax for a two-night stay, collected through the website. A week at a two-bedroom cottage on Nantucket, listed at $547 a night plus fees, carries a tax of $398.
The lead negotiators on the short-term rentals legislation were Rep. Aaron Michlewitz and Sen. Michael Rodrigues, who are now chairing the conference committee that is still working on a state budget for the fiscal year that began Monday.
Both the House and Senate versions of the budget anticipate roughly $28 million in revenue from the short-term rental tax.
"We had a great working relationship last session on short-term rentals, a bill that both you and I are very proud of," Michlewitz told Rodrigues at the first meeting of their budget conference committee on June 5. "That experience demonstrates our ability to work together to make responsible choices and preserve the commonwealth's strong fiscal conditions."
The short-term rentals law will also require some reorganization at the Department of Revenue. DOR announced last week that it will hold a hearing Aug. 6 to consider repealing two sections of regulations and replacing them with one newly-written section.
"Due to the recent changes to the room occupancy excise ... this regulation has become obsolete and is being repealed," DOR said in the hearing notice. "Relevant provisions have been incorporated into 830 CMR 64G.1.1, as part of DOR's consolidation of three different regulations relevant to the state and local room occupancy excise."
The new tax takes effect on the same day that MBTA riders are starting to pay more to use the transit system.
When he signed the short-term rental bill, Baker, who often touts his opposition to higher taxes, explained his support for the tax measures in the bill by saying his administration "has long supported leveling the playing field for short term rental operators who use their properties as de facto hotels."
Colin A. Young contributed reporting.