Gov. Baker of Massachusetts signed into law a bill regulating and taxing any kind of "short-term rental" (that is, any rental for 31 days or less). There is an exemption for properties that are leased out for 14 days or less per calendar year, but this law is expected to have a substantial impact on owners that rent vacation homes and utilize services such as Airbnb and VRBO.
This new law takes effect on July 1, 2019. Hosts are obligated to register with the State and their local municipality, carry $1 million in liability insurance per unit, and possibly be subjected to inspections that will vary from city to town. Additionally, short-term rentals will be subject to new taxes and fees, including, but not limited to, a state tax of 5.7%, local taxes up to 6% (Boston can levy up to 6.5%; Cape Cod and Islands can levy up to 8.75%) and "community impact fees" of up to 3% may be levied locally on professionally managed properties (owners of 2 or more units in one town).
It will be interesting to see what impact this will have on tourism and business travelers, particularly if cities and towns decide to max out the allowable fees and taxes.
See additional details at marealtor.com/ShortTermRentals.
Disclaimer: This article should not be construed as legal or tax advice. If you own, operate or are considering owning or operating a short-term rental property, we recommend that you seek guidance from a lawyer and/or tax professional.