01/28/2019 BOARD OF SELECTMEN Agenda Packet

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To: Rodney C. Collins, Town Manager From: Patrick J. Costello, Town Counsel Date:January 11, 2019 RE: Review of Chapter 337 of the Acts of 2018 the Short-Terra Rental Act On December 28, 2018, Chapter 337 of the Acts of 2018 (the "Act"), the so-called Short-Term Rental Act, was signed into law by Governor Baker. The law, which takes effect on July 1, 2019, amends G.L. c. 64G (Room Occupancy Excise) to include definitions and provisions applicable to short-term rentals made through internet hosting platforms, such as Airbnb, and, notably for municipalities on Cape Cod and the Islands, establishes the Cape Cod and Islands Water Protection Fund which is funded, in part, by revenues received under- the new short term rental excise tax imposed under section 3C of Chapter 64G. The new tax authorized by the Act will apply to a change of occupancy starting on or after July 1, 2019, that is booked on or after January 1, 2019. 1) Summary of the New Law: « Establishes a separate fund called the Cape Cod and Islands Water Protection Fund to provide subsidies and other assistance to local governments and other eligible borrowers for the payment of debt service costs on loans and other forms of financial assistance made for water pollution abatement projects in municipalities that are members of the Fund, and a new excise tax imposed at the rate of 2.75% of the total amount of rent for each taxable occupancy which is to be credited to the Fund. Establishes a state-wide registry for all operators of short term rentals and a certificate of registration to be administered by the Executive Office of Housing and Economic Development ("EOHEC") and Department of Revenue ("DOR") for all bed and breakfast establishments, hotels, lodging homes, short- term rentals'and motels, and requires registration as a condition to their operation. Authorizes the EOHEC to establish regulations relating to the registry and supporting the operation of short-term rental industry and hosting platforms (such as AirBnB) and-to consider the establishment of an online directory for the industry. Authorizes the DOR to facilitate, by regulation, a system of tax filing for those operators. The DOR is currently in the process of preparing guidelines and regulations to address such filings. Sets forth a comprehensive list of definitions concerning various types of short-term rentals, including: (a) Bed and breakfast establishments; (b) Bed and breakfast homes; (c) Hosting platforms (d) intermediaries (e) Operators (f) Professionally-managed unit (g) Short term rental (h) Rent. Authorizes a state excise tax upon the transfer of occupancy of a unit in various types of short-term rentals in the amount of 5% of the total rent, except where rent is less than $15/day which is exempted. 1