NH Senate breathes new life into Airbnb tax measure

Bill would require tax ID for short-term rentals

Those renting out lodging through such websites as Airbnb may have to include a rooms and meals tax ID on their web listings after all.

After a long debate, the NH Senate on Thursday decided to move House Bill 1590 forward to the Senate Finance Committee, rather than back to the Senate Commerce Committee for interim study, as that committee recommended – a move that would have effectively killed the measure for the session.

The decision to overturn the committee report gives proponents a chance to allay concerns that, in helping the Department of Revenue Administration attempt to catch those out of compliance with state tax law, it also won’t alert municipalities to people out of compliance with local zoning ordinances.

The bill doesn’t say anything about zoning. That’s discussed in a separate bill by Sen. Martha Fuller Clark, D-Portsmouth, which the Senate did send to interim study. HB 1590 simply defines a short-term rental business and requires that such businesses furnish a tax ID number.

The bill itself was a compromise. As originally proposed by Rep. Ed Butler, D-Hart’s Location, it would have required such businesses to register with the secretary of state. But the NH Association of Realtors, whose members often act as rental agents for vacation properties, opposed the bill and helped draft the compromise language.

The bill seemed destined for passage in the Senate as well until a lobbyist for vacation rental website HomeAway urged that the committee not doing anything “piecemeal,” without looking at comprehensive legislation. The committee recommended interim study, despite the objection of Butler, who tried to tell the committee that the issue had already been studied last year.

Seeking clarity

However, on Thursday, Sen. Lou D’Allesandro, D-Manchester, who made the interim study motion in committee, opposed it on the floor, citing “new information” on the previous study, and echoing concerns of the NH Lodging and Restaurant Association that short-term rentals should pay their taxes, just like those running registered bed and breakfasts do, to insure a “level playing field.”

Republican leadership initially opposed the motion, and Sen. Andy Sanborn, R-Bedford, said that it would encourage the DRA to go on a “fishing trip” and the number (or lack thereof) was akin to a “scarlet letter.”

Sen. David Boutin, R-Hooksett, asked, ”How many websites are they going to look at? Who is doing the looking? I’m warning you this will blow up when there is overreach.”

But the criticism from Sen. Jeb Bradley, R-Wolfeboro, was more nuanced.

Since the law defines short-term rentals as a business, he argued, couldn’t municipalities interpret that those renting out their rooms a few weekends are establishing a business in a residential neighborhood?

Supporters indicated that the bill makes it clear the definition was only for the purposes of taxation and that the definition makes clear that the rooms being rented are in a “residential unit.”

Still, Bradley wanted more clarity, and it appears that there will be an attempt to provide it this session. The Senate voted down the interim motion study on a 14-10 roll call vote, and the bill was passed on to the finance committee.