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So that wont help you avoid the tax. Ill send it right along. And yes, you should simply add a line item in your lease for the Lodging Tax under the payments section. Short-Term Lodging Tax Percentage by Town, Joan Talmadge - My husband Jeff and I created WeNeedaVacation.com in 1997, shortly after buying our Cape home. You can just add line items to it, including one for the Lodging Tax. Choose Social Security Number as ID type, enter the number, select Personal Income Tax as the account type and proceed with the verification process. We have been told by the DOR that there would be penalties for late filing and late payment of the tax, but they have not been specific. Am I required to carry insurance for my home? Hi, Rick, If you rent for 14 DAYS OR LESS, you are exempt from charging the tax! If you choose to attach your own spreadsheet, the cells must be in the same order as the template.

What a pain the law is making us change/add to insurance policies FYI, my insurance broker, who also has a rental on the Cape, said there are many options & one of the easiest (if my out of state primary residence insurer will allow) is an umbrella policy on the primary residence to make up the difference up to $1 mil liability on the rental property. Your feedback will not receive a response. The other sites, and realtors as well, collect the funds as well as service fees from vacationers and are directly involved in the rental transactions. Check with your town for details. For the intermediary, the Certificate of Registration is proof that the operator has registered with DOR. Taxable items include the rent and any other non-refundable charges, including cleaning, linen, or pet fees. If the rental week for a single renter starts the end of August and continues a couple of days into September, how do we report that rental income for the month? Homeowners would be required to cover the cost of the inspection. then you would register as an individual. The new law requires homeowners to maintain $1 million dollars in liability insurance to cover a rental home. Is We need a vacation going to add it somewhere in the calendar section or on their main home page? Do not use your ROC account number. Massachusetts has a state room occupancy excise tax rate of 5.7%. Registering and filing returns as a real estate agent. A .mass.gov website belongs to an official government organization in Massachusetts.

How can I determine what amount my town is assessing for the local tax? Hi, Kathie, we are still waiting to hear how the registration process will work. Check with local officials in the city or town in which the property is located to find out more. Joan. I only rent my Yes, of course, Becky. But you should NOT incorporate the tax within the rates posted on your Calendar. Note that intermediaries who already use MassTaxConnect do not need to re-register. Otherwise, if you pay by debit or credit card, there is a 2.35% convenience fee. If no tax is due, no return is required to be filed. c. 62C, 16B, Register as an operator or intermediary with MassTaxConnect, An Act Regulating and Insuring Short-Term Rentals, Massachusetts Room Occupancy Excise (Regulation), TIR 19-3: Changes to the Room Occupancy Excise in An Act Regulating and Insuring Short-Term Rentals, Tourism Destination Marketing District (TDMD) Fund FAQs, FY2020 Short Term Rental Economic Activity Report, FY2021 Short Term Rental Economic Activity Report. Thx. To renew: If you use an intermediary to rent your property, you must provide them with your registration certificate information. Operators will enter a list of their properties and receive a registration certificate for each one. I think it would be helpful for everyone involved. We also have our home listed on your site, and would love to get a copy of the your sample lease agreement as well if possible. And, yes, you should probably use a lease for regular long-term rentals rather than one for STRs. Include the operators registration certificate number on your return. Hi, John, the tax INCLUDES any non-refundable fees such as cleaning, linens, or pet ones. You will only need to register one time. Would you be so kind as to clarify what the correct procedure is? Any lease signed on or after this date for a rental term beginning July 1, 2019, or later must include the rental tax. So any leases you sign from now on for occupancy in your home starting July 1, 2019, or beyond are subject to the new tax. We would be lost without your organization. The coverage is required to defend and indemnify the owner and any tenants in the home for bodily injury and property damage. Or do you think the tax applies only to security deposits that arent returned after the stay because of damage? Intermediaries will register just once. This is what the DOR says about an increase in fees or a new fee: If an occupancy occurs after a rate increases or a new fee is imposed, whoever collects the rent must collect any amounts due from occupants that were not paid prior to occupancy. In the cities of Boston, Worcester, Cambridge, Springfield, West Springfield, and Chicopee, an additional 2.75% tax is chargedfor convention center funding. Registration with DOR is not required. business/commercial policy suitable for short term rentals. The info regarding the lodging tax payment due August 20th notes, in pertinent part: Even if you have no taxes due for July, log into your account and indicate 0 taxes due. Should a return be filed even if no tax is due as it states with Mass.gov Room Occupancy FAQs? You are still required, however, to register your home and provide insurance. Hi, David, Collecting the 2.75% Cape Cod & Island Water Protection Fund Excise on hotel rooms in Barnstable County booked prior to January 1, 2019 for occupancy on July 1, 2019 or after, Planning for changes in local excise rates, Generally, the tax rates in effect at the time of occupancy apply to all rentals subject to room occupancy excise. The 14-day-exception is determined on a per-property basis every year. The state excise and any local option excise, including the Convention Center Financing fee, the new Cape Cod and Islands Water Protection Fund excise, and any community impact fee are to be paid with the return. In such cases, it is the responsibility of the company to register as an intermediary and file returns on behalf of its agents for all the properties that any of its agents list for rent. Are you at We Need a Vacation going to be required to provide a list of all your active accounts to the Comm. Administered by the Massachusetts Department of Revenue, this page provides information on room occupancy excise tax and fees charged for stays at a short-term rental or traditional lodging establishment. For me, the Cape and Islands are magical all times of the year -- whether it's walking on Nauset Beach, playing golf, or enjoying family and friends. When did the tax go into effect? If I didnt have any taxable rentals during the previous month, do I still need to file with MassTaxConnect? Your town may also require a separate registration and registration fee. 8:30 a.m.4:00 p.m., Monday through Friday, Text of the law:

If I have 15 family members and friends that come to my home each year and share expenses do I have to charge a meals tax on the lobsters that I pay for? Visit the Division of Local Services Municipal Databank for current local option and community impact fee rates as well as information about which localities are part of the Cape Cod and Islands Water Protection Fund. The room occupancy excise tax applies to room rentals of 90 days or less in hotels, motels, bed and breakfast establishments, and lodging houses.

I would also appreciate a copy of your lease. We have no idea what the repercussions are for not registering or paying the tax. Very good point, David! Now the DOR is saying that we do not have to go into our account at all if we did not collect tax for a given month. I get great joy from helping fellow homeowners successfully rent their homes. . New Due Date for Sales and Use Tax Returns, New! If that exception applies to you, you must let us know at the time of registration that you will not be renting out your property for more than 14 days. Intermediaries are also required to provide a notice to operators within 30 days of filing a return with DOR that details the amount of rent collected with each occupancy as well as the taxes and fees they have collected and remitted to the Department. We will use this information to improve the site. If that exception applies to you, you must let us know at the time of registration that you will not be renting out your property for more than 14 days.

Nantucket and the Vineyardare notcurrentlypart of the Cape Cod and Islands Water Protection Fund.

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Amounts paid by an occupant for services offered by the operator on similar terms to non-occupants in the regular course of the operators business. of MA or the DOR at all as we have nothing to do with the collection or processing of our homeowners rental payments. The owner who registers as the operator will file returns and remit the tax to the Department if the owners are collecting rent directly. we have been renting our home through your site for several summer weeks over the past five years fortunately this year we had nearly all repeat renters who booked last year. All operators and intermediaries must register with DOR on MassTaxConnect. Yet to be determined if my primary residence insurer will do this. Various sources, such as the city or town website and local media, may have information about upcoming votes. Hello , Elizabeth.

No, Rick, you were correct initially. What form of payment will the Department of Revenue accept? Rents collected and reported by an intermediary are not considered exempt rents for the operator. Check with your insurance agent to be sure that you have adequate insurance coverage. Registration for operators with short-term rental properties that are rented for more than 31 days, Register as an intermediary or operators agent, An intermediary or operators agent must register with DOR using. But Im guessing not neither you nor they are dining out at a restaurant.

Id like to give them the background about this new tax. seeing it. A normal Homeowner policy of one Million dollars will not be sufficient. Alodging house or establishment is where lodgings are rented to four or more persons unrelated to the operator. Can we expect this site to do the same? If the operator does not provide this identifying information, you may not allow the operator to list their rental property with you. Note that while the statute provides for a 5% rate, an uncodified surtax adds .7% to that rate. Thanks so much,

It also does not include time-share property or bed and breakfast homes (see definition of bed and breakfast). Nantucket mayopt into the Trust by majority vote of town meeting. Boston Office 617-722-1570, District Office508-237-7001. Hi, Chris, We do not provide $1 M insurance policy, and the primary reason is that we advertise and market the homes on our site but are not in any way involved in the actual financial and business end. How should I present the tax on my listing? A bed and breakfast home is defined as a private owner-occupied house where not more than 3 rooms are rented, a breakfast is included in the rent and all accommodations are reserved in advance. For tax returns filed by either an operator or an intermediary, the Certificate number ensures that the taxes collected are distributed to the proper localities or special funds. An intermediary can arrange a property rental and collect rent for any operator whether they operate a bed and breakfast establishment, hotel, lodging house, short-term rental or motel. Email Joan, Is it possible to register and pay the tax on paper forms and send them USPS? Lucky you! An official website of the Commonwealth of Massachusetts. Beginning July 1, 2019, the room occupancy excise also applies to. An operator can be an owner, lessee, sublessee, holder of a mortgage, licensee, or anyone else operating a short-term rental. Hi, Lisa, like in a hotel stay, the tax is based on the check OUT date of your guest, and therefore due by the 20th of the following month. Hi, Richard, my apologies for not responding sooner. Do I have to file a return even if I have no rental every month? What specifically do I make a payment for on the 30th of the month? On line 2, taxable rent, do not include exempt rent from pre-January 1, 2019contracts. You will be asked to provide one of the following: A tax refund amount from one of your pastthreePersonalIncome Tax returns. The room occupancy excise tax applies to room rentals of 90 days or less in hotels, motels, bed and breakfast establishments, and lodging houses. Mass.gov is a registered service mark of the Commonwealth of Massachusetts. Instead, intermediaries will log in under the existing username and password and add the Room Occupancy Consolidated account type. Hi, Ann, yes, Ill email you a copy of our sample lease today! You can find more information about how to report and remit amounts collected in response to local rate changes in the regulation. We encourage all of our homeowners to check their policies and discuss this issue with their agents.

Originally, my contact at the Department of Revenue told us that taxes had to be paid every month and that if there were no taxes due for a given month, we would still have to put 0 on the form. How: to remit the tax, go toMassTaxConnect, log in, and look for the Make a Payment linkin the Room Occupancy Consolidated section. Do we have to split the amount to account for rental tax in August and September? Are we to tax the security deposit up front (along with the rent and non-refundable fees)? Toll-free in Massachusetts (800) 392-6089 Thank you everyone at WNAV for all the hard work you do. An Excel template is available for uploading through MassTaxConnect with all the appropriate cells in the appropriate order. Various sources, such as the city or town website and local media, may have information about upcoming votes. The taxes remitted would include state excise and any local option excise, including the 2.75% Water Protection Fund excise. Hi, Barbara, Id be happy to email you a copy of our sample lease, including the line item referring to the lodging tax. What if I rent my home by the week in the summer but long term (formore than a monthto one party)in the winter? You continue to be an incredible resource with the wealth of information you provide. You will find your certificate number after registering by logging into your MassTaxConnect account, selectingView Operators Properties from the Room Occupancy Consolidated tax type and choosing the View Certificate hyperlink. Beginning July 1, 2019, for short-term rentals only, cities and towns that have adopted a local excise may vote to charge an additional community impact fee up to 3% on the following types of property: For traditional lodgings (bed and breakfast establishment, hotel, lodging house or motel) the date of booking is not important. Operators may find that intermediaries require registration information regardless of the term of the short-term rental. Pricing and marketing for the 2020 rental season. Just wondering if when you say collecting the lodging tax as a separate fee that means that we need to request a separate payment from the renter for the amount of the taxes or if we can accept a single payment that includes both rental fees and tax? The property is not within a single-family, 2-family or 3-family dwelling that includes the operators primary residence. It does not include property that is rented out through tenancies at will or month-to-month leases. Joan I continue to be impressed and grateful by your site and its dedication to helping homeowners and renters. Even agents do not realize that insurance companies will refuse to pay claims if it involves a short term rental and the policy is a traditional homeowner policy. And finally, our subscription rates are considerably below any of those charged to homeowners by the Big Box sites. If you do withhold any of it, you will be responsible for paying the tax on the amount you withhold. Individual agents only need to register and file returns if they are independent agents not affiliated with any company and collect rent directly. Depending on the city or town, a local option room occupancy tax and other taxes and fees may also apply. For all types of rentals, as of July 1, 2019, the total amount of rent that is subject to tax includes all amounts collected by an operator or intermediary from an occupant, in exchange for occupancy. in the scale of 1, Strongly Disagree, to 5, Strongly Agree. dayfollowing the month represented bythe return. The amount must be greater than $0. The state excise and any local option excise, including the Convention Center Financing fee, the new Cape Cod and Islands Water Protection Fund excise, and any community impact fee are to be paid with the return. Seea list of the townsthat currently require registration. Anyone else able to share what you are doing for insurance liability coverage? Would you like to provide additional feedback to help improve Mass.gov? When and how do I remit the tax? Hi, Dorian, we believe that you should be specific in requesting the lodging tax as a separate fee in your lease, for example, but RECEIPT of the fee can be included as a single payment with the balance of your rent and other fees if you like. desimonej@dor.state.ma.us No, Kathleen, only rentals that BEGAN on July 1 or afterwards are subject to the tax. Room occupancy returns are due monthly on or before the 30thdayfollowing the month represented bythe return.

Hi, Marie, Im not sure exactly what youre asking, but I think this information from the top of the FAQs might help: The tax went into effect on January 1, 2019. An intermediary or operators agent must register with DOR usingMassTaxConnect. Are safety inspections required? If, however, you use an intermediary a realtor, property manager, or one of the large booking sites and they collect your funds for you, then THEY are responsible for collecting and remitting the tax for you. It is the responsibility of the intermediary to notify the operator of its responsibility to comply with all applicable municipal, state and federal laws. Only the 15 towns in Barnstable County are subject to the Wastewater Tax. How can I determine what amount my town is assessing for the local tax?

The email I just received from We Need a Vacation. Hi, Kimberley, I have found your listing on our site and will happily forward you a copy of our sample lease. But nothing is done by paper forms or checks. What if a town increases its local excise rate or imposes a new fee? Theres no need to register separately for each rental property. In Barnstable, Nantucket and Dukes Counties an additional 2.75% may be charged for the Cape Cod and Islands Water Protection Fund beginning July 1, 2019. All operators must register with DOR and obtain a Certificate of Registration for each property they offer for rent. If I currently charge $2500 in rent and $125 in cleaning fees, can I change the rent to $125 and the cleaning fees to $2,500 and avoid most of the tax? By separate vote, cities and towns may choose to include 2-family and 3-family dwellings that include the operators primary residence. What I have noticed and from my understanding is that other vacation sites already give a 1 million dollar policy and at least one of my realtors are also including that now as part of the rental.

A return is required to be filed only for any month when tax is due. thanks Gordon, Hi, Gordon, if I understand you correctly, yes, you would need to register, even if you wont be renting any longer in the future. No, only the 15 towns in Barnstable County are subject to the2.75%Wastewater Tax. Although operators have until January 15 to claim or renew a 14-day rental exemption for the calendar year, if the operator does not claim the exemption by that date for a property, it will be the responsibility of the intermediary or operators agent to collect sales tax on that rental as of January 1. So, one of my guests, rents for 28 days in June, which I price relatively low ($200 less than my Summer Rate) It looks like she would be better off next year to rent for 32 days. For a full list of towns listed on our site and what percentage they are each assessing, see our blog postShort-Term Lodging Tax Percentage by Town. Which homes are subject to the Wastewater Tax? Hi, Bob, unfortunately, no. must be completed no later than January 15 of the calendar year claiming the exemption. We are now all considered businesses and as such need to purchase a In addition to the state excise, Massachusetts cities andtowns arepermitted to chargealocal room occupancy excisetax up to 6% (6.5% for Boston). Is it okay for me to share this blog with my renters? Short term refers to any rental period of 31 days or less, so annual or long-term rentals are excluded from the tax. It is truly appreciated. The 14-day-exception is determined on a per-property basis every year. Operators should be aware that cities and towns may have separate registration or licensing requirements. I would love to see your sample lease, especially how to word the part about the new taxes Thanks a lot. If there is no separate legal entity that owns the property (a partnership, trust, LLC, etc.) Some towns have voted to increase the local tax or add a fee. Many thanks for all you do!

The only month for which you need to file are those in which you had one or more taxable rentals. short-term rentals of property for 31 days or less. Since the law doesnt specify that the 31+ days must be consecutive, I would think theres reason to believe that your 32-day guest is exempt from the tax. Generally, a real estate agent works for a real estate brokerage or company and any rent associated with a listing by a real estate agent is collected by the company. Should I absorb any of this tax myself? The tax went into effect on January 1, 2019. Hopefully, this answers your question. Currently this applies for all Barnstable County municipalities. The deadline for claiming the exemption for each calendar year is January 15 of the year claiming the exemption. Payment can be made by electronic transfer from your checking or savings account. to seep out into the fragile ecosystem of the Cape. Created by WeNeedaVacation.com. A town can assess an additional 3% Community Impact tax if the homeowner owns more than one rental home in the same town. As an intermediary, you must confirm that the operator whose rent you are collecting has registered with the Department of Revenue through MassTaxConnect. Cities and towns are required to notify DOR of any rate or fee changes using the notification of acceptance forms for, . ) or https:// means youve safely connected to the official website. about local rules, including whether a city or town is a member of the Cape Cod and Islands. If we are not on town sewer, do we pay a wastewater tax? Whoever collects the rent is responsible for the payment of the tax or fee due based on the effective date of the change, not the date a contract was signed or any money was collected.. We now provide this language on all listings: State and local taxes of X% will apply. The exact percentage is determined by the town in which your rental home is located. We have updated our FAQs with this item: The state will retain its 5.7% and remit the balance to your town. We have the tax listed in the lease based on the rental cost. It is necessary for all of us to register online and pay by logging in to your account with the DOR online. What items are taxable? A question for you I see on the MA Gov website the following as it relates to what is taxable: The total amount of rent that is subject to tax includes all amounts paid by an occupant to an operator or intermediary, even if not required for occupancy.

A return is only required to be filed for a month that tax is due. Its thoughtful expressions of appreciation like yours that make what we do gratifying and worthwhile! The reason is because you have to register in order to pay the tax for the 2 taxable weeks from this year. We have a septic and our own well. Hi my lease is split 7 days in August and 25 days in November for a total of 32 days to the same guest. Do not include sensitive information, such as Social Security or bank account numbers.

HomeAway, for example, only gives the insurance coverage to rental transactions that go through them. Ask your agent but demand to read the actual policy. Cities and towns are required to notify DOR of any rate or fee changes using the notification of acceptance forms for room occupancy and community impact fee. An operators agent includes a property manager, property management company, or real estate agent.