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[T]housands of Vermonters who offer short-term rentals through websites like Airbnb would face new regulations under a proposal that has advanced in the Senate.
Last week, the Senate Committee on Economic Development, Housing and General Affairs approved S.204, a bill that would require short-term rental hosts to register with the state, pay a small annual fee and self-certify that their properties comply with health and safety codes.
The certification process would also require short-term renters to acknowledge the 9 percent meals and rooms tax theyโre required to pay the state. Sen. Michael Sirotkin, D-Chittenden, said many renters donโt know about this requirement and arenโt paying their fair share in taxes.
Vermontโs Joint Fiscal Tax Office estimates that there are about 6,000 individual short-term-rental units in the state. About half of the rentals are offered by Airbnb hosts.
As more Vermonters are opening their homes to temporary renters, Sirotkin said itโs important for legislators put light regulations in place for the growing cottage industry.
โYou donโt want a disaster to happen because you have poor electrical work or poor water or your rails are at the wrong height,โ he said in an interview. โAnd you also want to make sure that weโre collecting the taxes on rooms and meals that are required.โ
Under the bill, short-term renters would have to register and complete the self-certification process in order to legally advertise their rentals online.
Lawmakers have yet to determine what the proposed registration fee would be, though committee members previously considered setting it at $65 or $130. The Senate Finance Committee, which will take up the bill in the coming weeks, will likely make a recommendation on the fee. Sirotkin said he expects it will be on the lower end of the scale.
Reviewing the proposal, the economic development committee heard some pushback from short-term renters.
Tom Piper, a South Burlington resident and Airbnb host, told committee members last week that the state shouldnโt be levying new fees and regulating short-term renters like โprofessional hoteliers.โ
Renters like himself are already required to pay the rooms and meals tax plus the state income tax on their earnings, he said.
โThis is sufficient and fair taxation to this small supplemental income for Vermonters,โ Piper said. โAdditional taxes and fees, to say nothing of paperwork, are unnecessary and would be detrimental to the state and to its people.โ
The Vermont Chamber of Commerce, which represents hotels and bed and breakfasts throughout the state, announced its support for the bill.
In a statement submitted to the economic development committee, Ronda Berns, the chamberโs vice president of tourism, said regulations in S.204 would help even the playing field for lodging businesses.
โCompetition thrives when everyone plays by the same set of rules,โ she wrote.
โTo not require unlicensed short-term rentals with one and two rooms or vacation rentals to be in compliance with the current health and safety, sanitation and fire laws creates a financial disadvantage for those licensed businesses following the laws of the State,โ Bernsโ statement said.
The state already has made some efforts to encourage short-term rentals to comply with the law.
In 2016, the Vermont Department of Taxes struck an agreement with Airbnb on the rooms and meals tax: the company now collects and delivers the tax on behalf of its Vermont renters.
However, other short-term rental companies operating in Vermont donโt have the same mechanism in place for collecting the tax, according to Sirotkin.
Analysis from a preliminary fiscal note on S.204 shows that the state could be missing between $712,000 and $2,020,000 in unpaid meals and rooms tax revenue from short-term renters who arenโt complying with the law.
But the goal of S.204 wouldnโt only be to recoup taxes and encourage renters to abide by safety codes.
Sirotkin said it would also give the state a much better understanding of the short-term rental market.
โThe industry is growing so rapidly that we want to know the size of the market, how many people are renting, how much theyโre collecting, how much itโs growing,โ he said.
He said he believes that the proposal will see the support it needs to succeed in the Senate.
โThe opposition would come if we were really doing a heavy-handed regulation,โ Sirotkin said, โbut weโre doing a very light touch on this.โ
