Revision: Jan. 30, 2017, 9:39 a.m.
HB 654-FN - AS INTRODUCED
2017 SESSION
17-0309
10/03
HOUSE BILL 654-FN
AN ACT relative to short-term and vacation rentals under the meals and rooms tax.
SPONSORS: Rep. Ohm, Hills. 36; Rep. Butler, Carr. 7; Rep. Twombly, Hills. 34; Rep. Seidel, Hills. 28; Rep. Azarian, Rock. 8; Sen. Fuller Clark, Dist 21; Sen. Birdsell, Dist 19
COMMITTEE: Commerce and Consumer Affairs
-----------------------------------------------------------------
This bill allows a lodging marketplace to be licensed by the department of revenue administration to collect meals and rooms taxes on behalf of vacation and short-term rentals.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
17-0309
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seventeen
AN ACT relative to short-term and vacation rentals under the meals and rooms tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Purpose. Internet platforms are enabling more Americans to earn extra income from their homes and investment properties through short-term and vacation rentals. At the same time, American travelers and family vacationers are saving money by renting fully-furnished homes instead of hotel rooms. The growth of this new market is encountering resistance from many governments, in the form of zoning restrictions and prohibitions that prevent homeowners from using their residences for short-term rentals. In 2016, Arizona enacted breakthrough legislation that enables short-term rentals while increasing tax revenue and preserving limited local regulation. The Arizona law stops local governments from prohibiting short-term rentals, while allowing local enforcement of regulations on parking and public safety. This law also makes taxes more efficient by allowing online platforms to collect and pay taxes at the state level, relieving homeowners of the need to file individually.
2 Meals and Rooms Tax; Short-Term Rentals; Reference Added. Amend RSA 78-A:4-a to read as follows:
78-A:4-a Advertisements of Short-Term Rentals. Any advertisement for a short-term rental by print, display, publication, distribution, or online listing offering a short-term rental shall include the meals and rooms license number of the operator, as defined in RSA 78-A:3, IV, or the lodging marketplace acting on behalf of the operator as provided in RSA 78-A:29. Violation of the provisions of this section may result in a warning from the department of revenue administration that the operator's license may be revoked, suspended, or denied. The warning shall include notification to the operator of his or her obligation to obtain a meals and rooms license and pay the meals and rooms tax under this chapter. Subsequent violations of the provisions of this section may constitute sufficient cause for revocation, suspension, or denial of license. Nothing in this section shall be construed to change or alter the nature of the use of a property for the purpose of determining compliance with a local zoning ordinance.
3 New Subdivision; Vacation and Short-Term Rentals. Amend RSA 78-A by inserting after section 26 the following new subdivision:
Vacation and Short-Term Rentals
78-A:27 Definitions. In this subdivision:
I. "Department" means the department of revenue administration.
II. “Lodging accommodations” means any space offered to the public for lodging, including any hotel, motel, inn, tourist home or house, dude ranch, resort, campground, studio or bachelor hotel, lodging house, rooming house, residential home, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or space.
III. “Lodging marketplace” means an entity that provides a platform through which an unaffiliated third party offers to rent a vacation rental or short-term rental to an occupant and collects the consideration for the rental from the occupant.
IV. “Lodging operator” means a person that rents to an occupant any lodging accommodation offered through a lodging marketplace.
V. “Lodging transaction” means a charge to an occupant by a lodging operator for the occupancy of any lodging accommodation.
VI. “Vacation rental” or “short-term rental” means any individually or collectively owned single-family house or dwelling unit or any unit or group of units in a condominium, cooperative, or timeshare, or owner occupied residential home, that is offered for a fee and for less than 30 consecutive days. Vacation rental and short-term rental do not include a unit that is used for any nonresidential use, including retail, restaurant, banquet space, event center, or another similar use.
78-A:28 Limitations on Regulation of Vacation Rentals and Short-Term Rentals.
I. A city, town, or unincorporated place may not prohibit vacation rentals or short-term rentals.
II. A city, town, or unincorporated place shall not:
(a) Enact or enforce any ordinance or regulation that prohibits or regulates short-term rentals except as provided in this section.
(b) Restrict the use of or regulate vacation rentals or short-term rentals based on their classification, use, or occupancy.
III. A city, town, or unincorporated place may enact and enforce an ordinance or regulation that regulates short-term rentals for the following purposes:
(a) Protection of the public’s health and safety, including rules and regulations related to fire and building codes, health and sanitation, transportation or traffic control, solid or hazardous waste and pollution control provided enforcement would not expressly or in practical effect prohibit the use of a property as a short-term rental, and designation of an emergency point of contact, if the city, town, or place demonstrates that the rule or regulation is for the primary purpose of protecting the public’s health and safety.
(b) Adopting and enforcing residential use and zoning ordinances, including ordinances related to noise, protection of welfare, property maintenance, and other nuisance issues, if the ordinance is applied in the same manner as other similar properties.
(c) Limiting or prohibiting the use of vacation rentals or short-term rentals for the purposes of housing sex offenders, operating or maintaining a structured sober living home, selling illegal drugs or pornography, obscenity, nude or topless dancing, and other adult-oriented businesses.
78-A:29 Meals and Rooms Tax License.
I. A lodging marketplace may register with department for a license for the payment of taxes at the election of the lodging marketplace, for taxes due under this chapter from a lodging operator on any lodging transaction facilitated by the lodging marketplace.
II. A lodging operator shall be entitled to an exclusion from any applicable taxes for any lodging transaction facilitated by a lodging marketplace for which the lodging operator has obtained from the lodging marketplace written notice that the lodging marketplace is licensed under RSA 78-A:4 to collect applicable taxes for all lodging transactions facilitated by the lodging marketplace, and transaction history documenting tax collected by the lodging marketplace.
III. A lodging marketplace that is licensed with the department under RSA 78-A:4 shall not be required to list or otherwise identify any individual lodging operator.
78-A:30 Lodging Taxation Rates and Base.
I. Except as provided by this section, no state or local transaction sales, use, franchise, or other similar tax or fee, however denominated, shall apply to the business of operating a lodging marketplace or, in the case of a lodging marketplace that is licensed pursuant to this subdivision, on any lodging transaction facilitated by the lodging marketplace or on any lodging operator with respect to any lodging transaction for which it has received documentation that the lodging marketplace has or will remit the applicable tax under this chapter to the department.
II. The tax base for a vacation rental or short-term rental is the gross proceeds of sales or gross income received as rent on occupancy as defined in RSA 78-A:3, VI by a lodging operator, except that the tax base shall not include the gross proceeds or gross income received by a lodging operator from any lodging transactions for which the lodging operator has received documentation from a registered lodging marketplace showing that the lodging marketplace has remitted or will remit the applicable tax under this chapter to the department.
III. The tax under this chapter may not be collected from a lodging operator with respect to any lodging transaction or transactions for which the lodging operator has received written notice or documentation from a registered lodging marketplace that it has or will remit the applicable tax with respect to those transactions to department pursuant to this subdivision.
IV. A lodging operator remains ultimately responsible, accountable, and liable for both the accuracy of information the lodging operator furnishes to the lodging marketplace and the return and payment of the full tax liability. The lodging operator is subject to audit, as provided by law, of the records in the lodging operator’s possession that are submitted to the lodging marketplace for the purposes of the return. A lodging operator may withdraw any of the lodging operator’s properties from a consolidated return on 30-days’ written notice to the lodging marketplace and the department.
V. The commissioner shall annually report the revenues collected from lodging marketplaces pursuant to this subdivision. Such a report shall not include taxpayer identification and shall comply with the privacy requirements in section 78-A:31.
78-A:31 Privacy. The department shall not disclose information provided by a lodging marketplace without the written consent of the lodging marketplace. Such information is not subject to disclosure pursuant requirements relating to public records, and may not be disclosed to any agency or political subdivision of this state. The department shall disclose confidential information provided by a lodging marketplace only to:
I. The taxpayer whom the information concerns;
II. The attorney general solely for use in an investigation or proceeding involving tax administration; or
III. Any person only to the extent necessary for effective tax administration in connection with the processing, storage, transmission, destruction, and reproduction of the information; the programming, maintenance, repair, testing, and procurement of equipment for purposes of tax administration; or the collection of the taxpayer’s civil liability; or
IV. Any state or federal judicial or administrative proceeding pertaining to tax administration if the taxpayer is a party to the proceeding and the proceeding arose out of, or in connection with, determining the taxpayer’s civil or criminal liability, or the collection of the taxpayer’s civil liability, with respect to any tax imposed under this chapter.
4 Effective Date. This act shall take effect July 1, 2017.
17-0309
Revised 1/26/17
HB 654-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to short-term and vacation rentals under the meals and rooms tax.
FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None
|
| |||
| Estimated Increase / (Decrease) | |||
STATE: | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease |
Expenditures | $0 | $0 | $0 | $0 |
Funding Source: | [ X ] General [ X ] Education [ ] Highway [ ] Other | |||
|
|
|
|
|
LOCAL: |
|
|
|
|
Revenue | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease |
Expenditures | $0 | $0 | $0 | $0 |
METHODOLOGY:
This bill enacts a new subdivision to the RSA 78-A, Meals and Rooms (M&R) Tax, addressing the application of the M&R Tax to the rental of rooms via a “lodging marketplace.” A lodging marketplace is defined as an entity that provides a platform through which an unaffiliated third party offers to rent a vacation rental or short-term rental and collects the consideration for the rental from the occupant. The bill sets the types of regulations municipalities may place on “vacation rentals” or “short-term rentals” within their jurisdiction. The gross proceeds of sales or gross income received as rent is the tax base for applying the M&R Tax to vacation and short-term rentals facilitated by lodging marketplaces. The bill further provides that a lodging marketplace may elect to register with the Department of Revenue Administration for an M&R Operators License and collect and pay the M&R Tax for transactions that the lodging marketplace facilitates. If the election is made, the “lodging operator,” meaning the person or the entity that has listed the accommodation on a lodging marketplace, shall not be liable for the M&R Tax. However, the lodging operator remains subject to audit for those records kept in the lodging operator’s possession. Lodging marketplaces that become licensed shall not be required to list or otherwise identify the individual lodging operator(s) who have utilized the lodging marketplace. Lodging marketplaces and lodging operators shall be exempt from any other type of state or local “sales, use, franchise, or other similar tax or fee".
Currently, RSA 78-A:3 and N.H. Administrative Rule Rev 701.15 provides regulation of lodging marketplaces, which is defined as an operator, including a person who acts in the capacity of an agent, that offers sleeping accommodations for rent to the general public. The taxable base for the M&R Tax is “[t]he consideration received for occupancy… without any deduction of any kind". Therefore, the M&R Tax is applied to the full amount of consideration paid for a taxable accommodation irrespective of how it is labeled by the operator or lodging marketplace. Lodging marketplaces are already required to obtain an M&R Operators License and collect the M&R Tax under the existing M&R Tax statute if the lodging marketplace receives any of the consideration for the subject transaction. The proposed legislation defines the taxable base for purposes of the application of the M&R Tax to lodging marketplaces more narrowly than the existing M&R Tax statute. Namely, the proposed legislation would narrow the taxable base by excluding non-optional auxiliary charges, such as the fee portion of the charge made by the lodging marketplace. As a result, the proposed legislation would result in an indeterminable decrease in state revenue. The Department can administer this bill without any additional costs that could not be absorbed within our operating budget.
AGENCIES CONTACTED:
Department of Revenue Administration