Short Term Rental Community Impact Fee

Articles 9 & 10 Fall Town Meeting Nov 13, 2023
Posted on: November 7, 2023 - 2:47pm

WHY: To increase revenue to the Town of Essex 

WHO: Renters of Short Term Rental Units will be impacted by this fee 

WHAT: 3% Fee over and above the 6% local lodging tax 

WHERE: In any rental unit that is rented not longer than 31 days that is not a hotel, motel, lodging house, or bed and breakfast establishment, where at least one room or unit is rented out by an operator through the use of advance reservations and where the rental is not by tenancy-at-will or month-to-month lease.   

WHEN: Fee is added to the renter’s bill during payment to owner (the owner then tenders the fee to the State and the State pays the fee to the Town) 

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Notes in the warrant:

Explanation A9:  If this article is passed, a 3% community impact fee will automatically be assessed on certain short-term rental transactions in the Town of Essex.  A short-term rental occurs when an apartment, house, cottage or condominium or a portion thereof is rented out to a third-party for occupancy purposes, where the rental is for a period of not more than 31 consecutive calendar days.  An example of a short-term rental is a rental arrangement made through Airbnb or similar services and does not include long-term leases or hotels, motels, lodging houses or bed and breakfasts.  This 3% fee is collected by the Department of Revenue and is paid to the Town of Essex only on transactions involving professionally managed units, i.e. where a single owner or operator rents out more than one short-term rental in the Town in a building that does not include the operator’s residence.  The fee is in addition to the 5.7% tax that is retained by the State and the 6% local excise tax paid to the Town.  Additional information about the short-term rental fee can be found at https://www.mass.gov/info-details/room-occupancy-excise-tax 

Explanation A10:  If passed, this article will apply the 3% community impact fee described above to all short-term rental units, even those that are not professionally managed.  This article can only be approved if Article 9 is approved first.