Legislative win for Corporate Housing

As State and City budgets face huge deficits politicians are looking for new things to tax. In most states monthly rentals are not subject to lodging or other taxes. This is important in keeping corporate housing rates competitive and a viable hotel alternative. Keep an eye on your legislature to make sure these unnecessary taxes are not voted in.

The Joint Conference Committee on the FY 2010 Massachusetts State Budget released its report last evening. I am pleased to inform you that the committee did not include an expansion of the room occupancy excise tax to so-called “transient accommodations.”

The compromise budget does include an increase in the existing room occupancy excise tax. The state portion of that tax will increase from 4% to 6% and the municipal local option portion of the tax will increase from 4.5% to 6.5%.

The House and Senate will convene later today to approve the conference committee report. This document cannot be amended – it is a straight up or down vote – so there is no danger that a tax on “transient accommodations” could be added. It will then be sent to Governor Patrick for his approval or line-item vetoes.

The decision of the legislative leadership not to include an expansion of the room occupancy tax in the FY 10 budget does not necessarily reflect their view of the merits of the issue. It more likely that the tax was not included in the budget simply because the amount of revenue that might be raised from doing so was too speculative to rely upon for their spending plans.

There are still numerous bills pending before the Joint Committee on Revenue to expand the room occupancy excise tax. In addition, the Joint Committee on Municipalities and Regional Government is still considering what action to take on the Report of the Special Commission on Municipal Relief (which report included a recommendation for taxing “transient accommodations”).
It is quite likely that the Legislature might yet still move on those bills in this session as part of an omnibus municipal relief package. We’ll have to wait a bit to see if that’s the case, but for the time being you can enjoy this victory.

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