Local Occupancy Tax & Short-Term Rental Notice

From the Pelham Select Board:

Do you rent one or more rooms in your home or other property you own for short-term rental? If so, please read this notice.

Massachusetts passed legislation in December 2018 which expands the room occupancy excise tax to short-term rentals of property starting July 1, 2019 for which a rental contract was entered into on or after January 1, 2019.

A short-term rental is an occupied property that is not a hotel, motel, lodging house or bed and breakfast establishment, where at least 1 room or unit is rented out by an operator through the use of advance reservations. A short-term rental includes an apartment, house, cottage, and condominium. It does not include property that is rented out through tenancies at will or month-to-month leases. It also does not include time-share property. A short-term rental is a rental that is not for more than 31 consecutive calendar days. The new law imposes the state excise tax rate of 5.7% plus a local Pelham excise tax of 6% (approved at May 11, 2019 Town Meeting) on short-term rentals of property for more than 14 days in a calendar year, starting July 1, 2019 (pending approval from the State may change date to October 1, 2019).

Please note that Pelham’s local excise tax will be collected by the state’s Department of Revenue and will be deposited in the Town’s General Fund. These funds will then be available for appropriation by Town Meeting.

If this law applies to your situation you are required to register with the Massachusetts Department of Revenue. Click here for more information about what you need to do.