There are now three taxes associated with short term rentals:
5.7% = State Tax **
6.0% = Plymouth Local Tax **
3.0% = Plymouth Community Impact Fee (new)
** = Taxes that were already assessed to hotels & motels in Plymouth, now applicable to short term rentals
So, basically, guests of hotels and motels in Plymouth have already been assessed the State and Local taxes. As you know, what is new is that guests of short term rentals will now pay these two taxes, PLUS a 3% Community Impact Fee that was just approved by Town Meeting (Special Article 7).
To your question about the 6% Local Tax, the Town did not have to take a new vote to accept the Special Act that established the local hotel & motel levy. The State’s update to the Special Act (adding the short term rentals) is automatically considered as being adopted by those communities that had already accepted the original language of the Special Act. Therefore, only a vote for the new Community Impact Fee was required.
Here is info from the Massachusetts Department of Revenue’s website, explaining why a new vote for the 6% Local Tax was not needed:
How do I know if a local option excise applies to my short-term rental?If a city or town currently has already adopted a local option room occupancy excise, the local option automatically applies to a short-term rental starting July 1, 2019 for which a rental contract was entered into on or after January 1, 2019. No further action is required by these cities or towns to impose the local option on short-term rentals. You can find a listing of municipalities that have a local option by visiting the Division of Local Service’s Municipal Databank.
We currently have a local option room occupancy excise in my city/town. What actions do we need to take to have it apply to short-term rentals?As indicated in the previous FAQs, if your city or town has already adopted a local option room occupancy excise, your local excise will automatically apply to a short-term rental starting July 1, 2019 for which a rental contract was entered into on or after January 1, 2019. No further action is required for the local excise to apply to short-term rentals. The local excise applies to the same occupancies as the state excise.
As a general rule, a municipality that accepts a statute accepts any amendments the legislature subsequently makes to the statute. Therefore, if a municipality has accepted a local option statute, then it operates under the statute as amended. No further action is necessary unless the legislature provides otherwise. Moreover, in this case, section 15 of the legislation states the following: “A city or town that accepted section 3A of chapter 64G of the General Laws before July 1, 2019 shall be deemed to have accepted said section 3A of said chapter 64G for the purposes of this act.”
