New Hampshire bill seeks to require tax collection by peer-to-peer companies

Online facilitators of short-term peer-to-peer lodging facilities and car rentals pushed back hard Monday against a bill now in the New Hampshire Senate that would force them to collect and pay the rooms and meals tax.

But those representing traditional rental agencies defended the bill, and lawmakers held their ground.

“You are going to hear from some people it is a new tax,” testified House Speaker Sherman Packard, R-Londonderry, prime sponsor of House Bill 15 before the Senate Ways and Means Committee. “But it’s not.”

When first introduced in the House, the bill only required car-sharing companies like Turo to start collecting the 9% rooms and meals tax. Car rentals account for $9.2 million of the $335 million in revenue the tax provided last fiscal year. According to Turo, 400 Granite Staters used the service to rent out their cars.

“It’s a small piece, yeah,” said Packard. “When Uber came out it was a small piece and look where they are now.”

Turo presented itself as “providing a marketing opportunity” for a car owner host – who on average earns about $300 a month – or for the customer who may need a pickup truck one day to clear out the garage, said local lobbyist Maura Weston. The law, she said, amounts to “government interference with the use of personal property,”.

“This law will shut down car-sharing in New Hampshire,” she warned.

But traditional rental car agencies, like Enterprise Holdings, say they don’t have a problem with competition.

“They just want equal rules of the road for all rental car agencies,” said Chryssa Alexis, Enteprise’s Regional vice president for New Hampshire and Maine, based in Londonderry. While the tax needs to be paid either way, a lot of car owners don’t realize it and this bill would “create clarity,” she said

Michael McLaughlin, a lobbyist for Avail Car Sharing doesn’t see it that way.

“They are leveling the playing field against (car agencies that can spend) billions and billions in marketing.”

Bigger implications

But the bill took on bigger implications when the House broadened it to include short-term housing rentals like Airbnb, or rather its competitors, since Airbnb voluntarily collects the tax.

The bill passed the House on a 289-78 vote April 9.

It’s unclear many homeowners who rent out their properties though these services are already paying the tax and how many are avoiding it. The Department of Revenue Administration won’t even hazard a guess on how much more revenue – on top of the $58.5 million collected last year – would be gained if it collected the money from third-party platforms themselves.

One thing is clear: the DRA would have a much easier job if the bill is passed, since they will be dealing with dozens of companies, as opposed to thousands of homeowners and car owners.

For the NH Lodging and Restaurant Association, the bill was “long overdue,” said Henry Veilleux, the association’s lobbyist. Some homeowners are just renting out a room once in a while, but others place it on the market “time after time after time and it becomes a business.” Some pay the tax, but others aren’t aware of it, and “this will make it easier to collect,” he said.

Critics contended that became too broad and could now encompass travel agents and websites.

The bill excludes travel agents’ commissions from the tax, but it does require that agents collect the tax from customers, Nearly half of them do that, said Genevieve Strand, director of Advocacy at American Society of Travel Advisors. But it is an “administrative burden” at a time when agencies have had to lay off 60% of its employees and the industry “has been brought to its knees by Covid-19.”