(1)
Statement of Purpose; Effective Date; Outline of
Topics.
(a)
Statement
of Purpose. The purpose of 830 CMR
64G.1.1 is to explain the
application of the state and local room occupancy excise imposed under M.G.L.
c. 64G, to transfers of occupancy in a bed and breakfast establishment, hotel,
lodging house, short-term rental or motel. Additionally, 830 CMR
64G.1.1
provides rules that govern operators and intermediaries with regard to
collecting, remitting and reporting the state and local room occupancy excises
imposed on all types of taxable accommodations under M.G.L. c. 64G,
§§ 3 and 3A respectively and, where applicable, the Convention Center
Financing Fee, Cape Cod and Islands Water Protection Fund Fee, and the
Community Impact Fee imposed under M.G.L. c. 64G, §§ 3B, 3C and 3D,
respectively.
(b)
Effective Date. 830 CMR
64G.1.1 is effective for
transfers of occupancies in bed and breakfast establishments, hotels, lodging
houses and motels beginning on or after July 1, 2019. 830 CMR
64G.1.1 is
effective for transfers of occupancies in short-term rentals that commence on
or after July 1, 2019 and for which contracts with occupants were entered into
on or after January 1, 2019.
(c)
Outline of Topics. 830 CMR
64G.1.1 is organized as
follows:
1. Statement of Purpose, Effective
Date, Outline of Topics;
2.
Definitions;
3. Accommodations
Subject to Tax;
4.
Exemptions;
5. Rent and
Occupancy;
6. Intermediary
Responsibilities and Requirements;
7. Local Room Occupancy Excise;
8. Convention Center Financing Fee;
9. Cape Cod and Islands Water Protection Fund
Fee;
10. Community Impact
Fee;
11. Room Occupancy Excise
Returns and Payments; and
12.
Recordkeeping.
(2)
Definitions. For
the purpose of 830 CMR
64G.1.1, the following terms shall have the following
meanings:
Bed and Breakfast Establishment. A
private owner-occupied house where not less than four rooms are let and a
breakfast is included in the rent, and all accommodations are reserved in
advance.
Bed and Breakfast Home. A private
owner-occupied house where not more than three rooms are let and a breakfast is
included in the rent, and all accommodations are reserved in advance.
Commissioner. The Commissioner of
Revenue or the Commissioner's duly authorized representative.
Hosting Platform. Services through
digital platforms, third-party websites, software, online-enabled applications,
mobile phone applications or other, similar electronic processes that
allow:
(a) an operator to advertise,
list, or offer the use of an accommodation subject to the excise under M.G.L.
c. 64G in exchange for rent;
(b) an
operator to collect the payment of rent on an accommodation; and
(c) a person to arrange, book, reserve or
rent an accommodation.
Hotel. A building used for the feeding
and lodging of guests licensed or required to be licensed under M.G.L. c. 140,
§ 6.
Intermediary. A person or entity,
other than an operator, that facilitates the sale, use or possession of an
occupancy to the general public and charges a room charge; provided, however,
that the term "facilitates" shall include a person or entity that brokers,
coordinates or in any other way arranges for the purchase, sale, use or
possession of occupancies by the general public; provided further that
Intermediary shall include a hosting platform and
operator's agent.
Local Excise. The local room occupancy
excise imposed by M.G.L. c. 64G, § 3A.
Local Fee. Each of the Convention
Center Financing Fee, as provided in 830 CMR 64G.1.1(8); the Cape Cod and the
Islands Water Protection Fund Fee, as provided in 830 CMR 64G.1.1(9); and the
Community Impact Fee, as provided in 830 CMR 64G.1.1(10).
Lodging House. A house licensed or
required to be licensed under M.G.L. c. 140, § 23 and where lodgings are
rented to not less than four people who are not within the second degree of
kindred to the owner or operator of such lodging house.
Motel. A building or portion of a
building in which a person is lodged for hire with or without meals and that is
licensed or required to be licensed under M.G.L. c. 140, § 32B; provided,
however, that a Motel shall not include a hotel or
lodging house.
Occupancy. Occupancy as provided in
830 CMR 64G.1.1(5)(c).
Occupant. A person who uses, possesses
or has a right to use or possess a room in a bed and breakfast establishment,
hotel, lodging house, short-term rental or motel for rent under a lease,
concession, permit, right of access, license or agreement.
Operator. A person operating a bed and
breakfast establishment, hotel, lodging house, short-term rental or motel in
the commonwealth including, but not limited to, the owner or proprietor of such
premises, the lessee, sublessee, mortgagee in possession, licensee or any other
person otherwise operating such bed and breakfast establishment, hotel, lodging
house, short-term rental or motel.
Operator's Agent. A person who, on
behalf of an operator of a bed and breakfast establishment, hotel, motel,
short-term rental or lodging house:
(a)
manages the operation or upkeep of a property offered for rent; or
(b) books reservations at a property offered
for rent; provided, however, that an
Operator's Agent
shall include, but not be limited to, a property manager, property management
company or real estate agent.
Person. An individual, partnership,
trust or association, with or without transferable shares, joint-stock company,
corporation, society, club, organization, institution, estate, receiver,
trustee, assignee or referee and any other person acting in a fiduciary or
representative capacity, whether appointed by a court or otherwise, or any
combination of individuals acting as a unit.
Professionally-managed Unit. One of
two or more short-term rental units that is located in the same city or town,
operated by the same operator and are not located within a single-family,
two-family or three-family dwelling that includes the operator's primary
residence.
Rent. Rent as provided in 830 CMR
64G.1.1(5)(a).
Short-term Rental. An owner-occupied,
tenant-occupied or non-owner occupied property including, but not limited to,
an apartment, house, cottage, condominium or a furnished accommodation that is
not a hotel, motel, lodging house or bed and breakfast establishment,
where:
(a) at least one room or unit
is rented to an occupant or sub-occupant; and
(b) all accommodations are reserved in
advance; provided, however, that a private owner-occupied property shall be
considered a single unit if leased or rented as such.
State Excise. The state room occupancy
excise imposed by M.G.L. c. 64G, § 3.
(3)
Accommodations Subject To
Tax.
(a)
Bed and
Breakfast Establishments, Hotels, Lodging Houses and Motels. A
state room occupancy excise is imposed pursuant to M.G.L. c. 64G, § 3 upon
the transfer of occupancy for a period of 90 consecutive days or less of any
room or rooms in a bed and breakfast establishment, hotel, lodging house or
motel in Massachusetts, unless the transfer is otherwise exempt as provided
under 830 CMR
64G.1.1(4). A local room occupancy excise also applies to
transfers of occupancies in these types of accommodations if a city or town has
adopted a local excise pursuant to the provisions of M.G.L. c. 64G, § 3A.
Where the duration of occupancy in these types of accommodations exceeds 90
consecutive days, no excise is imposed on any portion of the stay, including
the first 90 consecutive days. Neither the state nor local room occupancy
excise is imposed if the total amount of the rent charged is less than $15 per
day. Generally, the state and local room occupancy excise and any applicable
local fees is collected by the operator from the occupant and the operator then
remits the excise to the Commissioner at the rate prescribed by the applicable
provisions of M.G.L. c. 64G. However, separate rules apply to transfers of
occupancy in accommodations described in 830 CMR
64G.1.1(3)(a) when the
transfer is facilitated by an intermediary.
See 830 CMR
64G.1.1(6) for the rules applicable to intermediaries.
(b)
Short-term
Rentals.
1.
General
rules. The state room occupancy excise is imposed pursuant to
M.G.L. c. 64G, § 3 upon the transfer of occupancy for a period of 31
consecutive days or less of any room or rooms in a short-term rental in
Massachusetts, unless the transfer is otherwise exempt as provided under 830
CMR
64G.1.1(3)(b)2. and 830 CMR
64G.1.1(4). A local room occupancy excise also
applies to transfers of occupancies in a short-term rental if a city or town
has adopted a local excise pursuant to M.G.L. c. 64G, § 3A. Where the
duration of occupancy in a short-term rental exceeds 31 consecutive days, no
excise is imposed on any portion of the stay, including the first 31 calendar
days. Neither the state nor local room occupancy excise is imposed if the total
amount of the rent charged is less than $15 per day. Generally, the state and
local room occupancy excise and any applicable local fees are collected by the
operator from the occupant and the operator then remits the excise to the
Commissioner at the rate prescribed by the applicable provisions of M.G.L. c.
64G. However, separate rules apply to transfers of occupancy in short-term
rentals described in 830 CMR
64G.1.1(3)(b) when the transfer is facilitated by
an intermediary.
See830 CMR
64G.1.1(6) for the rules
applicable to intermediaries.
2.
14-Day Exemption. No excise is imposed upon the
transfer of occupancy of a short-term rental for a total of not more than 14
days in a calendar year, provided that the operator has first:
a. registered with the Commissioner; and
b. filed a declaration with the
Commissioner setting forth the intention to transfer occupancy in the
short-term rental for a total of not more than 14 days in a calendar year, in
accordance with the procedures set forth in 830 CMR
64G.1.1(11). Where an
operator operates multiple short-term rental properties, eligibility for the
14-day exemption shall be determined separately for each property. The 14-day
exemption is determined on a per-property basis every calendar year. If an
operator registers with the Commissioner and files a declaration under 830 CMR
64G.1.1(3)(b)2.b. but in fact operates a short-term rental for more than 14
days in the calendar year, the 14-day exemption under 830 CMR
64G.1.1(5)(b)2.
shall not apply, and such operator will be responsible for paying the state and
local excise and any applicable local fees for all transfers of occupancy
during the calendar year where the excise is not collected by an intermediary
on behalf of the operator, including those occurring during the first 14 days.
If an operator enters into an agreement with an intermediary to facilitate the
rental of their property, as provided under 830 CMR
64G.1.1(6), the operator is
responsible for informing the intermediary whether their property qualifies for
the 14-day exemption each calendar year. If an operator informs an intermediary
that their property qualifies for the 14-day exemption but the operator
continues to rent it through the intermediary for more than 14 days, such
operator will be responsible for paying the state and local excise and any
applicable local fees due on rentals occurring during the first 14 days through
that intermediary. If an operator uses more than one intermediary to facilitate
the rental of their property, the rules in 830 CMR
64G.1.1(3)(b)2. and (6)
apply to each listing with each intermediary.
(c)
Examples. The
following examples illustrate the provisions of 830 CMR
64G.1.1(3)(b).
Example 1: Mrs. Smith owns two
adjoining short-term rentals (Property 1 and Property 2). Mrs. Smith has
registered as an operator and filed a declaration of her intention to transfer
occupancy in Property 1 for a total of not more than 14 days in a calendar
year. From August 1st through August
10th inclusive, she rents out Property 1 to an
occupant. This rental is not subject to the excise on short-term rentals,
because it is for less than 14 days in the calendar year, provided that Mrs.
Smith does not rent Property 1 for more than four additional days in the
calendar year. If Mrs. Smith does rent Property 1 for more than four additional
days in the calendar year, then all subsequent rentals of Property 1, as well
as the rental from August 1st through August
10th are subject to the applicable state and local
excises and any local fees.
Example 2: In August, Mrs. Smith rents
out Property 2 for an original term of ten days. Mrs. Smith has registered as
an operator, but did not file any declaration of an intention to transfer
occupancy in Property 2 for a total of not more than 14 days in a calendar
year. Although the transfer of occupancy in a short-term rental for a total of
not more than a total of 14 days in a calendar year is generally not subject to
the excise on short term rentals, the requirements of 830 CMR 64G.1.1(3)(b)2.
are not met here. The entire ten-day rental period of Property 2 is subject to
the applicable state and local excise and any local fees.
Example 3. Mr. Johnson owns a
short-term rental property. Mr. Johnson has registered as an operator, but did
not file a declaration of an intention to transfer occupancy in his property
for a total of not more than 14 days in a calendar year. He rents out his
property to an occupant without using an intermediary for the period October
1st through October 10th.
Mr. Johnson also arranges four one-week rentals of his property in November and
December through two different intermediaries. Mr. Johnson's short-term rental
property has been rented out for more than 14 days, and each rental is subject
to the excise on short-term rentals. Mr. Johnson is responsible for collecting
and remitting state and local excises and any local fees for the rental from
October 1st through October
10th. Each intermediary that rents out Mr. Johnson's
property during the months of November and December is responsible for
collecting and remitting state and local excises and any local fees on those
rentals. Any further rentals of Mr. Johnson's property either directly or
through an intermediary occurring during the remainder of the calendar year
will be subject to the excise on short-term rentals.
(4)
Exemptions.
(a)
Exempt Accommodations. The following types of
accommodations are exempt from the state and local room occupancy excise and
local fees:
1. lodging accommodations at a
federal, state or municipal institution.
2. lodging accommodations, including
dormitories, at religious, charitable, educational and philanthropic
institutions. The exemption in 830 CMR
64G.1.1(4)(a)2. does not apply to
lodging accommodations provided by a religious, charitable, educational or
philanthropic institution at a hotel or motel that is generally open to the
public and operated by the institution.
3. privately-owned and operated convalescent
homes or homes for the aged, infirm, indigent or chronically ill.
4. religious or charitable homes for the
aged, infirm, indigent or chronically ill.
5. summer camps for children up to 18 years
of age or developmentally disabled individuals as defined in M.G.L. c. 64G,
§ 2. A summer camp that offers its facilities offseason to individuals 60
years of age or older for a period of not more than 30 days in a calendar year
will retain the exemption under 830 CMR
64G.1.1(4)(a)5.
6. bed and breakfast homes.
7. lodging accommodations provided to
seasonal employees by employers.
8.
alcohol and drug free housing certified by M.G.L. c. 17, § 18A.
9. tenancies at will or month-to-month
leases.
10. time-shares, as defined
in M.G.L. c. 183B, § 2.
11.
occupancy of a room or rooms in any accommodation subject to 830 CMR
64G.1.1 if
the occupant is an employee of the United States Military traveling on official
United States orders that encompass the date of such occupancy. An operator or
intermediary shall maintain such records as the Commissioner requires to
substantiate exemptions claimed under 830 CMR
64G.1.1(4)(a)11.
See830 CMR
64G.1.1(12).
12. occupancy of a room or rooms in a
short-term rental of not more than a total of 14 days in a calendar year,
provided that the operator has first:
a.
registered with the Commissioner; and
b. filed a declaration with the Commissioner
setting forth the intention to transfer the short-term rental for not more than
a total of 14 days in a calendar year, in accordance with the procedures set
forth in 830 CMR
64G.1.1(11).
(b)
Occupancy by State Government
Representatives. The transfer of occupancy of a room or rooms in
any accommodation subject to 830 CMR
64G.1.1 to employees of any state, its
agencies or political subdivisions, and charitable organizations that are not
exempt from state room occupancy taxes under federal laws are subject to the
state and local room occupancy excise, as well as any applicable local fees,
whether or not such employees are on official business and whether such
employees or their employers pay for the occupancy.
(5)
Rent and
Occupancy.
(a)
Rent.
1.
In General. For purposes of 830 CMR
64G.1.1, rent is
the total consideration paid by or on behalf of an occupant, including payment
for any service, cleaning or other charge, to an operator or an intermediary
associated with occupancy, valued in money, whether received in money or
otherwise, including all receipts, cash, credits and property or services of
any kind or nature. Rent includes, but is not limited to, booking fees and
other service charges paid to operators or intermediaries. Rent does not
include:
a.
bona fide
refundable security deposits;
b.
any amount paid by an occupant that is included in the taxable gross receipts
of the operator under M.G.L. c. 64H or 64I where the operator is a vendor for
purposes of M.G.L. c. 64H or 64I; or c. amounts paid by an occupant to an
operator for services offered by the operator on similar terms to non-occupants
in the regular course of the operator's business.
2.
Amenities and
Extras. Consideration allocated to amenities provided by an
operator to all guests, whether or not used and whether or not separately
stated by the operator, is rent subject to the applicable state and local room
occupancy excise and any local fees. Examples might include free shuttle
service provided by a hotel, or a beach parking sticker provided to all
occupants by the operator of a short-term rental. Separately stated, optional
charges for services provided by an operator, such as the charge for a roll
away bed, are included as rent unless otherwise excluded under 830 CMR
64G.1.1(5)(a)1. Rent does not include optional, separately stated charges for
services provided by another vendor not related to occupancy. Examples of such
charges might include charges for airline tickets, a whale watch cruise, or
ferry tickets, if optional.
(b)
Examples. The
following examples illustrate the application of 830 CMR
64G.1.1(5)(a).
Example 1: Hotel in City A rents rooms
to occupants for a two night stay at the rate of $500.00 per night. It also
charges its occupants for linen services totaling $100 for the two-night stay.
The linen services are included in the rent subject to the state and local
excise. Hotel also charges its occupants for spa services, including facials
and massage services. These services are offered only to occupants of Hotel.
Because these services are not offered to non-occupants, the charges for these
services are included in the rent subject to the applicable state and local
excise and any local fees. In this example, rent includes the nightly room
rate, charges for linen services, and any charges for spa service, whether or
not such charges are separately stated.
Example 2: Same facts as Example 1,
except that Hotel also offers the same spa services to non-occupants on similar
terms offered to occupants. Charges for the spa services are not included in
the rent subject to the applicable state and local room occupancy excise and
any local fees.
Example 3: Hotel's amenities include
various recreational facilities, including a swimming pool, tennis court, and
exercise center. Use of these amenities is available only to occupants of
Hotel. Hotel imposes a separate charge to occupants for these amenities.
Charges for the amenities are included in the rent subject to the applicable
state and local excise and any local fees, whether Hotel's occupants use the
amenities or not. The value of the recreational facilities in comparison to the
value of rooms offered for occupancy is irrelevant.
Example 4: Intermediary accepts a
booking for Hotel on July 1, 2019 for a three-night stay starting on July 14,
2019. The charge for the room is $100 per night before taxes and fees.
Intermediary charges a $25 fee for booking the transaction. The local excise in
City A is 6%, for a total excise of 11.7%. The charges for the booking are as
follows:
Room Charge
|
$300.00
|
Booking Fee
|
$25.00
|
Total Rent
|
$325.00
|
Tax 11.7%
|
$38.03
|
Total Amount Due
|
$363.03
|
Example 5: Through an intermediary,
Mr. Jones rents out two separate units located in Town B as short-term rentals.
These units are not located within a single-family, two-family or three-family
dwelling that includes Mr. Jones primary residence. They are
professionally-managed units as defined in 830 CMR 64G.1.1(2). Each unit is
rented for 15 days. The charge for each rental is $2,500 per unit. Intermediary
charges a booking fee of $25.00 for each rental. Town B adopted a 4% local
excise. Town B has also voted to impose a Community Impact Fee of 3% of the
rent on each transfer of occupancy of these professionally managed units. In
addition, Town B is a member of the Cape Cod and the Islands Water Protection
Fund.
The charges for each booking to be collected by Intermediary
are as follows:
Unit Rental Charge:
|
$2,500.00
|
Unit Booking Fee:
|
$25.00
|
Total Rent:
|
$2,525.00
|
Tax: 15.45%
|
$390.11
|
5.7% State excise plus 4% Local excise plus 3% Community Impact
Fee plus 2.75% Cape Cod and the Islands Water Protection Fund Fee)
Total Amount Due:
|
$2,915.11
|
Example 6: Hotel also operates a
restaurant on its property. The restaurant charges sales tax on meals purchased
by occupants of Hotel. Rent does not include amounts subject to sales tax where
the hotel operator is acting as a vendor with respect to its taxable sales. If
an occupant purchases a meal at the restaurant and pays sales tax on it, the
amount paid for the meal would not be included in the rent subject to the
applicable state and local room occupancy excise and any local fees, even if
the purchase was charged to the occupant's room, because the hotel is operating
the restaurant as a vendor and collecting sales tax on the meal.
Example 7: Seaside Cottage is a
short-term rental operated by Ms. Smith on Martha's Vineyard. As a courtesy to
her guests, Ms. Smith includes linens and ferry tickets at no extra charge.
Whether or not Ms. Smith separately states the cost of those items, the amount
of consideration allocated to them is included in rent subject to the
applicable state and local room occupancy excise and any local fees.
Example 8: Same facts as example 7,
except that Ms. Smith provides linens to her guests for an additional fee, and
purchases ferry tickets on their behalf at their request. The linen fee is a
separately stated, optional charge provided by the operator, and therefore is
included in rent subject to the applicable state and local room occupancy
excise and any local fees. The charge for the ferry tickets is an optional,
separately stated, charge for a service provided by another vendor not related
to occupancy. It is not included in the rent.
(c)
Occupancy. For
purposes of 830 CMR
64G.1.1, occupancy is the use or possession or the right to
the use or possession of a room in a bed and breakfast establishment, hotel,
lodging house or motel designed and normally used for sleeping and living
purposes for a period of not more than 90 consecutive calendar days, regardless
of whether such use and possession is as a lessee, tenant, guest or licensee,
or the use or possession or the right to the use or possession of a room in a
short term rental normally used for sleeping and living purposes for a period
of not more than 31 consecutive calendar days, regardless of whether such use
and possession is as a lessee, tenant, guest or licensee. Occupancy includes
the right to the use or possession of the furnishings or the services and
accommodations, including breakfast in a bed and breakfast establishment,
accompanying the use and possession of such a room.
1.
Occupancy Exceeding 90
Consecutive Calendar Days in a Bed and Breakfast Establishment, Hotel, Lodging
House or Motel. In cases where the period of occupancy in a bed
and breakfast establishment, hotel, lodging house or motel exceeds 90
consecutive calendar days the following rules apply:
a.
When There Is an Agreement on
the Duration of the Occupancy. When the duration of the occupancy
has been agreed to in advance, will exceed 90 consecutive calendar days, and is
evidenced by a written agreement, the occupancy is not subject to tax unless,
despite the agreement, the rental terminates before the
90th day. In such a case, each day of occupancy is
subject to tax.
b.
When
There Is No Agreement on the Duration of the Occupancy. When there
is no agreement on the duration of the occupancy, each day of occupancy is
subject to tax. After passage of the 90th
consecutive calendar day, any tax collected must be returned or credited to the
occupant.
c.
Examples. The following examples illustrate the
application of the rules set forth in 830 CMR
64G.1.1(5)(c). If a local excise
or local fee applies under the rules set forth in 830 CMR
64G.1.1(7) through
(10), the rules in the examples set forth in 830 CMR
64G.1.1(5)(c)1. also apply
to the local excise and applicable local fee.
Example 1. A enters into an agreement
in writing with B to occupy a room in B's hotel for a period of 100 days. No
state or local excise is imposed, unless the agreement terminates before the
90th day.
Example 2. A occupies a room in B's
motel on a day-to-day basis and without any written agreement for a period of
100 days. B must collect and pay over tax to the Department of Revenue on a
monthly basis for the first 90 consecutive days. If the occupancy extends
beyond 90 consecutive days, the tax must be returned to A. B may recover any
tax paid in accordance with 830 CMR 64G.1.1(11)(b), as applicable.
Example 3. A corporation contracts
with a hotel operator to reserve several rooms for use by its employees on a
continuing basis. The corporation may cancel its reservations by 7:00 P.M. each
evening without obligation; otherwise, the corporation is liable for the full
rate for occupancy. The operator is required to collect the excise on fees for
occupancy whenever the corporation is liable for room rental unless continuous
occupancy exceeds 90 days. Exercise of the cancellation option constitutes a
break in the occupancy by the corporation.
Example 4. An individual occupies the
same room in the same hotel for 62 consecutive days, then moves to a different
room in the same hotel. The operator is required to collect the excise on the
rent for the new room until the occupancy exceeds 90 days. Moving from one room
to another within the same hotel does not constitute a break in occupancy,
regardless of whether the rates on the two rooms differ.
Example 5. An airline contracts with a
motel operator for use by airline employees of eight rooms to be paid for by
the airline (whether or not the rooms are actually used). The airline is
considered the occupant for purposes of determining whether the occupancy
exceeds 90 days. If it does so, the operator need not collect the excise on the
rental charges to the airline.
2.
Occupancy Exceeding 31
Consecutive Calendar Days in a Short-term Rental. In cases where
the period of occupancy in a short-term rental exceeds 31 consecutive calendar
days, the occupancy is not subject to tax.
(d)
Complimentary
Rooms. Where the transfer of occupancy in a bed and breakfast
establishment, hotel, lodging house, short-term rental or motel to an occupant
is provided on a complimentary or discounted basis, the following rules apply:
1. The state and local excise and any
applicable local fees must be collected if there is consideration (in money or
otherwise, including services) for the transfer valued at $15 or
more.
2. When a bed and breakfast
establishment, hotel, lodging house, short-term rental or motel receives a
benefit, either direct or indirect, beyond the actual rent paid in money, the
state and local excise and any applicable local fees are based on the fair
market value of the room received. Examples of direct and indirect benefits
include, but are not limited to, advertising services; exchange of goods and
services; services by employees, and benefits to employees.
3. When a bed and breakfast establishment,
hotel, lodging house, short-term rental or motel receives no benefit beyond the
actual rent paid in money, the state and local excise and any applicable local
fees are computed with respect to the amount actually paid for the
occupancy.
(6)
Intermediary Responsibilities and Requirements. An
operator may enter into a written agreement with a person or entity under which
the person or entity is responsible for collecting rent or facilitating the
collection of rent directly from an occupant who is renting a room or rooms in
a bed and breakfast establishment, hotel, lodging house, short-term rental or
motel offered for occupancy by the operator. Any person or entity that agrees
to collect or facilitate the collection of rent from an occupant for occupancy
in a bed and breakfast establishment, hotel, lodging house, short-term rental
or motel in Massachusetts is considered an intermediary under M.G.L. c. 64G and
for purposes of 830 CMR
64G.1.1. An intermediary includes both an operator's
agent that is working "on behalf of" an operator and a hosting platform that
may not be an agent or otherwise function "on behalf of" the operator. An
intermediary is subject to the requirements in 830 CMR
64G.1.1(6)(a).
(a)
Requirements for
Intermediaries. An intermediary is required to:
1. register with the Commissioner through
Mass Tax Connect.
2. assess,
collect, report and remit the state and local excises and any applicable local
fees to the Commissioner as required in 830 CMR
64G.1.1(11). Intermediaries
must file returns in the manner prescribed by the Commissioner under 830 CMR
64G.1.1(11)(c).
3. maintain records
of any excises collected that have been remitted to the Commissioner and
provide those records to the Commissioner upon request in accordance with 830
CMR
64G.1.1(12).
4. ensure that the
operator is registered with the Commissioner prior to the intermediary
collecting any rent or facilitating the collection or payment of rent on behalf
of an operator. In order to comply with the provisions of 830 CMR
64G.1.1(6)(a)4., an intermediary is required to confirm that the operator whose
rent it is collecting is registered with the Commissioner by obtaining the
operator's registration certificate number issued by the Commissioner from the
operator. The operator's certificate number must be included on all returns
filed by the intermediary where the intermediary is reporting and remitting tax
collected for the operator in accordance with 830 CMR
64G.1.1(11). If an
intermediary is not able to obtain a certificate number from an operator, the
intermediary must instead obtain and include the operator's federal employer
identification number or Social Security number or such other identifying
information as the Commissioner may prescribe on all returns filed by the
intermediary where the intermediary is reporting and remitting tax collected
for the operator. If such certificate or other operator identification
information is not included on its return, an intermediary will not be in
compliance with the provisions of 830 CMR
64G.1.1(6)(a). 5. notify the operator
of its responsibility to comply with all applicable municipal, state and
federal laws including, but not limited to, the collection and remittance of
required excises. Notification may be by hand or mail delivery or through any
electronic process, such as electronic message, mobile or smart phone
application, digital media or communications portal.
6. provide notice to the operator that any
excises due have been collected and remitted to the Commissioner. Such notice
shall be in the form of a statement issued to the operator within 30 days of
filing a return that includes an itemization of the date of each occupancy, the
rent imposed on each occupancy, including any booking fees charged, as well as
amounts of all state and local excises and any applicable local fees collected
and remitted to the Commissioner on behalf of the operator. Notification may be
by any means described in 830 CMR
64G.1.1(6)(a)5.
(b)
Liability of
Intermediaries. As provided in 830 CMR
64G.1.1(6)(a), an
intermediary is required to collect the proper amount of state and local
excises and local fees due and remit such amounts to the Commissioner.
Notwithstanding the requirements of 830 CMR
64G.1.1(6)(a), an intermediary will
not be liable for any state or local excises or local fees not properly
collected and remitted as long as the intermediary's failure to properly
collect and remit is due to the intermediary's reasonable reliance on
information provided by the operator about the nature of the accommodation,
including whether the operator qualifies for the 14-day exemption, the duration
of the occupancy, or other similar representations affecting the determination
of the proper tax due related only to those rentals offered by the
intermediary. With respect to the 14-day exemption, the intermediary shall
collect state and local excises and local fees with regard to a short term
rental property starting with the first day of any such rental every year
unless the operator represents to the intermediary that the property will be
rented for a total of 14 days or fewer during that calendar year. If an
operator informs an intermediary that their property will be rented for a total
of not more than 14 days during a particular calendar year, the intermediary is
not responsible for collecting and remitting state and local excises and local
fees on rentals of that property for the first 14 days that property is rented
by the intermediary during that year. However, if after receiving such a
representation from the operator the intermediary rents that property for more
than 14 days, the intermediary is responsible for collecting and remitting any
state and local excises or fees for all subsequent short term rentals of that
property occurring during that calendar year. Any state and local excises and
local fees due on rentals occurring during the first 14 days is the
responsibility of the operator. If any information provided by an operator and
relied on by an intermediary was misrepresented, the operator will be liable
for any unpaid state or local excise or local fees resulting from any such
misrepresentation. Absent fraud or misrepresentation by an operator, an
operator will not be liable for the failure of an intermediary to collect and
remit the proper amount of tax due to the Commissioner.
(7)
Local Room Occupancy
Excise. In addition to the state room occupancy excise imposed
under M.G.L. c. 64G, § 3, each Massachusetts city and town may impose a
local room occupancy excise on the transfer of occupancy of a room or rooms in
a bed and breakfast establishment, hotel, lodging house, short-term rental or
motel as provided by M.G.L. c. 64G, § 3A.
(a)
Acceptance of Local Excise
and Notification to Commissioner. In order for a city or town to
impose the local room occupancy excise, the city or town must accept the
provisions of M.G.L. c. 64G, § 3A in the manner specified in that section.
The city or town must determine the rate of the local excise, and then must
notify the Commissioner of its acceptance of the local excise, the rate at
which the local excise is to be imposed, and the effective date of the local
excise. This notification must be received by the Commissioner within 48 hours
of the municipal vote taken in accordance with M.G.L. c. 64G, § 3A.
Failure of a city or town to notify the Commissioner within this time period
may impact the effective date of the local excise under 830 CMR
64G.1.1(7)(b).
(b)
Effective Date of Local Room Occupancy Excise. The
local excise takes effect on the first day of the first calendar quarter
following 30 days after acceptance by a city or town, or on the first day of
such later calendar quarter as the city or town may designate, when it accepts
the provisions of M.G.L. c. 64G, § 3A as specified therein.
Example 1: Town C accepts the local
excise on March 15, 2019. The local excise in Town A will take effect on July
1, 2019, unless Town C has designated a later effective date.
Example 2: City D accepts the local
excise on January 30, and designates an effective date of October
1st of the same year. The local excise in City D
will take effect on October 1st of the same
year.
(c)
Public
Listing of Local Option Excise Rates and Local Fees. The
Commissioner intends to maintain a list of local option excise rates and local
fees for every city and town on its website as part of the Municipal
Databank.
(d)
Collection of Local Excise. The local excise is
collected together with the state excise and remitted in the same manner and at
the same time as the state excise, as provided by 830 CMR
64G.1.1(11).
(e)
Exemptions from Local Excise. The local excise
exemptions are the same as the state excise exemptions. A local excise is not
imposed if the total amount of rent is less than $15 per day or its equivalent,
or if the accommodation is exempt under M.G.L. c. 64G, § 2. A local excise
is not imposed upon the transfer of occupancy of a short-term rental if the
unit is rented for a total of not more than 14 days during the full calendar
year and the requirements of 830 CMR
64G.1.1(3)(b)2. are met. For
municipalities that have adopted the local room occupancy excise in accordance
with M.G.L. c. 64G, § 3A, the rules applicable to occupancy set forth in
830 CMR
64G.1.1(5)(b) also apply to the local excise.
(f)
Bed and Breakfast
Establishment, Hotel, Lodging House, Short-term Rental or Motel Located within
More than One City or Town. The following rules will apply to the
collection of the local excise and any applicable local fees by an operator or
intermediary of a bed and breakfast establishment, hotel, lodging house,
short-term rental or motel which is located within more than one city or town:
1.
When Only One of the Cities or
Towns Has Imposed the Local Excise. The local excise and any
applicable local fees is required to be collected upon every transfer of
occupancy in a bed and breakfast establishment, hotel, lodging house,
short-term rental or motel which occurs on or after the effective date of the
local excise. The amount of the local excise and any applicable local fees
collected and paid to the Commissioner will be credited in full to the city or
town which has imposed the local excise.
2.
When Two or More of the Cities
or Towns Have Imposed Local Excises. The local excise and any
applicable local fees is required to be collected at the highest rate imposed
by such cities or towns for every transfer of occupancy in a bed and breakfast
establishment, hotel, lodging house, short-term rental or motel which occurs on
or after the effective date of the local excise. The amount of the local excise
and any applicable local fees collected and paid to the Commissioner will be
credited by the Commissioner to each city or town which has imposed the local
excise in proportion to the number of rooms located in each city or town in
which the transfer of occupancy occurs.
(g)
Revocation or Amendment of
Local Excise. A city or town cannot impose the local excise for a
period shorter than 12 months. If a city or town wishes to revoke or amend its
local excise, such revocation or amendment may not take effect until at least
12 months after the date the local excise was last imposed or amended. If a
city or town wishes to impose a local excise after a local excise has been
revoked, the imposition of the local excise may not take effect until at least
12 months after the date the local option excise was last revoked.
(8)
Convention Center
Financing Fee. In addition to the state and local room occupancy
excises, a Convention Center Financing Fee is imposed on transfers of occupancy
of a bed and breakfast establishment, hotel, lodging house, short-term rental
or motel in Boston, Cambridge, Springfield, West Springfield, Chicopee or
Worcester. The Convention Center Financing fee is collected together with the
state and local option excise and remitted in the same manner and at the same
time as these excises, as provided by 830 CMR
64G.1.1(11). A Convention Center
Financing Fee is not imposed if the total amount of rent is less than $15 per
day or its equivalent, or if the accommodation is exempt under M.G.L. c. 64G,
§ 2. A Convention Center Financing Fee is not imposed upon the transfer of
occupancy of a short-term rental if the unit is rented for a total of not more
than 14 days during the full calendar year and the requirements of 830 CMR
64G.1.1(3)(b)2. are met. For municipalities that have adopted the local room
occupancy excise in accordance with M.G.L. c. 64G, § 3A, the rules
applicable to occupancy set forth in 830 CMR
64G.1.1(5)(c) also apply to the
Convention Center Financing Fee.
(9)
Cape Cod and Islands Water
Protection Fund Fee. A local excise is imposed on transfers of
occupancy in a bed and breakfast establishment, hotel, lodging house,
short-term rental or motel in every city and town in Massachusetts that is a
member of the Cape Cod and Islands Water Protection Fund.
See
M.G.L. c. 64G, § 3C. As of the effective date of 830 CMR
64G.1.1, all
Barnstable County cities and towns are members of the Cape Cod and Islands
Water Protection Fund, but cities and towns in Nantucket and Dukes County are
not members of the Cape Cod and Islands Water Protection Fund. Membership in
the Cape Cod and Islands Water Protection Fund is administered by the
Department of Environmental Protection. The transfer of occupancy of a room or
rooms in a bed and breakfast establishment, hotel, lodging house, short-term
rental or motel in a municipality that becomes a member of the Cape Cod and
Islands Water Protection Fund after June 1, 2019 shall be subject to the local
excise under M.G.L. c. 64G, § 3C and 830 CMR
64G.1.1(7) on the first day
of the calendar quarter following 30 days after the municipality has joined the
Cape Cod and Islands Water Protection Fund or on the first day of a later
calendar quarter as the municipality may designate. The Cape Cod and Islands
Water Protection Fund Fee is collected together with the state and local option
excise and remitted in the same manner and at the same time as these excises,
as provided by 830 CMR
64G.1.1(11). A Cape Cod and Islands Water Protection
Fund Fee is not imposed if the total amount of rent is less than $15 per day or
its equivalent, or if the accommodation is exempt under M.G.L. c. 64G, §
2. A Cape Cod and Islands Water Protection Fund Fee is not imposed upon the
transfer of occupancy of a short-term rental if the unit is rented for a total
of not more than 14 days during the full calendar year and the requirements of
830 CMR
64G.1.1(3)(b)2. are met. For municipalities that have adopted the local
room occupancy excise in accordance with M.G.L. c. 64G, § 3A, the rules
applicable to occupancy set forth in 830 CMR
64G.1.1(5)(c) also apply to the
Cape Cod and Islands Water Protection Fund Fee.
(10)
Community Impact
Fee.
(a)
Professionally-managed Units. A city or town that
adopts a local excise pursuant to the provisions of M.G.L. c. 64G, § 3A
may, by a separate vote and in the same manner of acceptance as set forth in
M.G.L. c. 64G, § 3A, impose a Community Impact Fee on the total amount of
rent upon each transfer of occupancy of a professionally managed unit that is
located within that city or town. M.G.L. c. 64G, § 3D.
(b)
Two-family and Three-family
Dwellings. A city or town that votes to impose a Community Impact
Fee under 830 CMR
64G.1.1(10)(a) may, by a separate additional vote and in the
same manner of acceptance as set forth in M.G.L. c. 64G, § 3A, also impose
the Community Impact Fee at the same rate as imposed under 830 CMR
64G.1.1(10)(a) upon each transfer of occupancy of a short-term rental unit that
is located within a two-family or three-family dwelling that includes the
operator's primary residence. M.G.L. c. 64G, § 3D.
(c)
Collection and
Remittance. The Community Impact Fee is collected together with
the state and local option excise and remitted in the same manner and at the
same time as these excises, as provided by 830 CMR
64G.1.1(11). A Community
Impact Fee is not imposed if the total amount of rent is less than $15 per day
or its equivalent, or if the accommodation is exempt under M.G.L. c. 64G,
§ 2. A Community Impact Fee is not imposed upon the transfer of occupancy
of a short-term rental if the unit is rented for a total of not more than 14
days during the full calendar year and the requirements of 830 CMR
64G.1.1(3)(b)2. are met. For municipalities that have adopted the local room
occupancy excise in accordance with M.G.L. c. 64G, § 3A, the rules
applicable to stays of occupancy set forth in 830 CMR
64G.1.1(5)(c) also apply
to the Community Impact Fee.
(11)
Room Occupancy Excise
Returns and Payments.
(a)
Operator Registration with the Commissioner. All
operators must register each property they offer for occupancy with the
Commissioner on Mass Tax Connect. Only one owner per-property is allowed to
register as the operator for that property. Upon registration, operators should
identify the months they offer accommodations for occupancy. Short-term rental
operators are also required to file an annual declaration with the Commissioner
on Mass Tax Connect indicating their intention to offer their short-term rental
for occupancy for a total of not more than 14 days in a calendar year in order
to claim the 14 day exemption as described in 830 CMR
64G.1.1(3)(b)2. Failure
to file an annual declaration will subject the operator to the state and local
excises and applicable local fees for all short-term rentals in the calendar
year.
(b)
Consistent
Accounting Method. For purposes of reporting rent and any state
and local excises and local fees to the Commissioner on its return, an operator
or intermediary may report and remit such amounts collected from occupants
using any reasonable method of accounting, so long as the same method is used
consistently for each monthly return required to be filed. In the event that an
operator or intermediary changes its accounting method, the operator or
intermediary must make adjustments on any return filed that uses such different
method to prevent any double counting or omission of rents.
(c)
Returns and
Payments. Every operator or intermediary collecting rent must file
a room occupancy excise return electronically through MassTaxConnect on or
before the 20
th day of the month following the
calendar month indicated on the return. This return must report the following
information:
1. operator certificate
registration number or other operator identification information as the
Commissioner may prescribe;
2.
total rent charges for occupancies during the calendar month itemized by each
operator; and
3. total taxable rent
charges for occupancies during the calendar month itemized by each operator.
All taxes related to taxable rent charges reported on the
return are due and must be paid at the time the return is filed.
If an operator enters into an agreement with an intermediary to
collect or facilitate the collection of rent from an occupant as provided in
830 CMR 64G.1.1(6), the intermediary, rather than the operator, is required to
collect and remit the tax due with respect to occupancies arranged through that
intermediary. All state and local excises and applicable local fees are to be
reported on and remitted with the return. An intermediary that does not report
rent charges and remit the tax due in accordance with 830 CMR 64G.1.1(11)(c)1.
through 3., shall not be in compliance with 830 CMR 64G.1.1(6).
Notwithstanding the requirements set forth in 830 CMR
64G.1.1(11), an operator or intermediary is required to file a return only for
any month when tax is due. If no tax is due, no return is required to be filed.
Any changes made to a return that has been filed with the Commissioner must be
made by filing an amended return electronically through Mass Tax Connect in
accordance with the rules in
830 CMR 62C.26.2,
Amended Returns.
(d)
Interest. Any
portion of the state and room occupancy excise and any applicable local fees
that is not paid on or before the due date of the room occupancy excise return
will have interest added to it from the due date of the return to the date the
tax is paid, at a rate prescribed by M.G.L. c. 62C, § 32.
(e)
Penalties. Any
operator or intermediary collecting rent that fails to timely file a return,
pay the excise and any applicable local fees, or fail to file a return and or
pay the required excise in the format required by Commissioner may be subject
to penalties under M.G.L. c. 62C.
See
830 CMR
62C.33.1:
Interest, Penalties, and
Application of Payments.
(f)
Notification Requirements to Occupants.
Every occupant's bill must separately state the charges associated with rent,
the dollar amount and rate of the state excise, the name of any city or town
imposing a local excise, the dollar amount and rate of the local excise, and
the dollar amount and rate of any applicable Convention Center Financing Fee,
Cape Code and Islands Water Protection Fund Fee and Community Impact
Fee.
(g)
Returns and
Payments during COVID-19 Pandemic. Notwithstanding 830 CMR
64G.1.1(11)(a) through (f), with respect to operators whose cumulative
liability in the 12-month period ending February 29, 2020 for returns required
to be filed under M.G.L. c. 62C, § 16(g) is less than $150,000, returns
and payments otherwise due during the period beginning March 20, 2020 and
ending June 1, 2021 shall be suspended. All such returns and payments,
including any local option amounts, shall be due on October 30, 2021. This
suspension does not apply to intermediaries. Intermediaries shall continue to
file returns and make payments in accordance with the rules set forth in 830
CMR
64G.1.1(11)(a) through (f).
(12)
Recordkeeping.
Operators and intermediaries collecting rent must keep records sufficient to
determine whether the proper amount of tax has been paid, as well as records
substantiating repayment of previously paid taxes to occupants whose rentals
exceed 90 days in length. These records must be kept for the amount of time
specified in
830 CMR
62C.25.1:
Record Retention,
and must be produced for review by the Commissioner in the course of an audit
of the operator or intermediary.