view this online | view past newsletters
JPFCO

Short Term Rental Tax

Jun 29, 2019       Issue: 413

J Pepper Frazier Company
Short Term Rental Tax Newsletter
 
TAX. WHAT IS IT AND WHY DO WE HAVE IT?

On December 28, 2018, The Governor signed a bill to tax and regulate short term rental properties in MA.

What defines a Short Term Rental?
-Stays that are 31 days or less

How much are the taxes?
-State Tax: 5.7%
-Local Tax: 6%

Who does the tax apply to?
-Tax applies to any leases written after January 1, 2019 for leases that start after to July 1, 2019.

-Additional taxes that have not been adopted yet are the Cape and Islands Water protection 2.75%. The Nantucket Selectboard will vote in the fall of 2019 regarding this additional tax.

Any Chance I Can be Tax Exempt?
YES! However, there is no exemption on registration or insurance. The tax exemption is if your home rents for 14 days or less in the calendar year, tenant is active military, or tenant is renting the structure for more than 31 days.

Even if you are tax exempt, you still have to register at Mass Tax Connect
  MASSTAXCONNECT 
  COLLECTING TAXES, PAYING, AND YOUR CERTIFICATE NUMBER

The first return and payment is due on August 20, 2019. After that date, taxes should be remitted on the 20th day of each month.

Who is required to file returns and pay the taxes due?
Generally, all operators are required to collect tax from the occupant and remit these amounts to the Department. However, an operator may enter into an agreement with an intermediary for the intermediary to collect and remit tax the on the operator's behalf.

How do I file returns and make payments?
All room occupancy returns and payments of amounts due with the return must be done electronically using MassTaxConnect.

CERTIFICATE NUMBER.
The owner is required to have a certificate number. A certificate number can be received once an operator registers on Mass Tax Connect. All homeowners have until November 1, 2019 to obtain their certificate number and to give it to an intermediary for tax remittance purposes.

*Grace Period for 2019: If the homeowner does not have their certificate number Aug 20, Sept 20, Oct 20, then either their social security or EIN number will be submitted until November 1, 2019.
    MASSTAXCONNECT  
OPERATOR VS INTERMEDIARY & NON-TAXABLE ITEMS

WHO IS AN OPERATOR?
An operator is anyone operating a bed and breakfast establishment, hotel, lodging house, short term rental or motel. An operator can be an owner, lessee, sublessee, the holder of a mortgage, licensee, or anyone else operating a short-term rental. An operator does not have to be a resident of Massachusetts or a Massachusetts based business for the room occupancy rental rules to apply.

WHO IS AN INTERMEDIARY?
An intermediary is anyone besides an operator who helps arrange a property rental with any operator and who also charges rent on behalf of the operator. An intermediary includes a broker, hosting platform, or operator's agent.

NON-TAXABLE ITEMS
1. Bonafide security deposits.
2. Amounts paid by the occupant that were previously subject to sales or used by the operator. An example would be ferry tickets.
3. Concierge Services

  Mass.Gov 
REGISTER HERE

MassTaxConnect is Massachusetts's Department of Revenue web-based application that you can use to:

-File returns, forms, and make payments for the current or previous tax periods.
-Research, update, amend, and maintain your tax accounts with the Department of Revenue 24 hours a day, 7 days a week.
-Reduce both the time and expense involved in generating and handling paper checks and returns.
-Provide faster, easier, and more accurate results than paper processing methods.
  MASSTAXCONNECT 
 
HOME  |  REAL ESTATE  |  RENTALS  |  NANTUCKET  |  JPFCO  |  NEWSLETTER

One of the oldest and most experienced nantucket real estate
JPFCO | 19 Centre Street Nantucket, MA 02554

Call Us: (508) 228-3202