Baker flip-flops on Airbnb tax

Won't support Senate's tax on short-term rentals

STATE HOUSE NEWS SERVICE

GOV. CHARLIE BAKER, admitting Monday that he spoke too soon last week when he endorsed a Senate plan to tax short-term housing rentals, showed himself to be conflicted over how to maintain the anti-tax image he tries to project and still be the fair-minded business advocate who wants to even competition across industries.

Baker offered a mea culpa on Monday afternoon, telling reporters “lesson learned” after he backed a Senate-proposed expansion of the state’s hotel and motel tax before actually reading the bill.

“It’s very broad and it covers a variety of rentals that I would never dream of having Massachusetts tax,” Baker said after meeting with House Speaker Robert DeLeo and Senate President Stanley Rosenberg, who dialed in remotely from Philadelphia where he is attending the Democratic National Convention.

The Senate proposal applies the state’s lodging tax to short-term rentals through online websites such as Airbnb to help pay for an expansion of the earned income tax credit for low-income families. Since saying he would sign the measure last Thursday on the radio, Baker has since expressed concern that the Senate bill would also tax rooms at currently-exempt bed and breakfasts which have fewer than four rooms as well as vacation rentals in places like Cape Cod.

“My position at the moment is going to be I’m not interested in raising taxes until I do a little more homework on this. That’s probably what I should have said last week,” Baker said.

But after his administration signaled that Baker was still supportive of Airbnb’s efforts to work with policymakers to “assess and collect the appropriate room occupancy taxes,” Baker appeared torn over how best to put traditional hotels and online, short-term rental businesses on equal footing.

“That’s a legitimate issue and one that’s worth discussing, but if anybody thinks I’m walking back my no new taxes view of the world, they’re mistaken,” Baker said.

Baker has resisted efforts to get him to entertain higher taxes to pay for priorities within the budget, but in 2014 he refused to sign a no-new-taxes pledge saying at the time that he did not want to be boxed into a position should a proposal arise to simplify the tax code.

In Cleveland last week at the Republican National Convention, anti-tax evangelist Grover Norquist, the founder of Americans for Tax Reform, said Massachusetts voters have reason to be concerned.

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State House News Service
“So you have to worry. You always do. There’s only one reason not to take the pledge and that’s because you want to raise taxes, and if you’re not going to do it, you put it in writing,” Norquist said.

However, Baker on Monday seemed to harden his anti-tax position even if it meant leaving the market imbalance in place between hotels and short-term apartment rentals.

“I’m not interested in raising taxes. I am interested in level playing fields. At this point in time on this particular issue, those two things seem to be in conflict,” Baker said.