Beginning October 1, 2024, the Massachusetts Department of Revenue will assess an additional 3% tax (community impact fee) on leases of “professionally managed” short-term rental units on Nantucket. “Professionally managed” means owners renting 2 or more short-term rental units on Nantucket (either on the same or separate lots) where the exception below does not apply. All rentals taking place starting October 1 or after are subject to the fee. Below is a summary of the information. We strongly advise you review this information with your attorney, accountant, and/or tax professional to determine if your units are subject to the fee and if your MassTaxConnect account information is accurate
Who Is Subject to the Community Impact Fee?
Owners renting 2 or more short-term rental units on Nantucket (either on the same or separate lots) where the exception below does not apply. Something important to note is that this only applies to units owned by the same entity. If one has multiple properties, each under different ownership (LLC, Trusts, etc.), your guests may be exempt from this tax. Please reach out to your tax professional and/or the MassDOR directly for guidance on this.
EXCEPTION: If one or more of the owner’s short-term rental units is located within the owner’s single-family, two-family, or three-family primary residence, then the owner is not required to pay the fee. Example: if a garage is attached to the primary dwelling (the owner’s single-family home) that unit is NOT subject to the fee because it is considered “located within” the owner’s primary residence.
Free-Standing/Detached Structures Do Not Fall Within This Exception:
Rental units that are free-standing and detached from the owner’s primary residence do not fall within the exception and the owner must pay the fee on all short-term rental units he or she operates. This includes any free-standing structure such as a cottage, pool house, guest house, or any other type of free-standing rental unit including a detached garage.
IMPORTANT TO NOTE: Regardless of the rental activity on the same lot as the owner’s primary dwelling, any other short-term rental units located on separate lots operated by the same owner are subject to the fee.
For any questions about your MassTaxConnect account, how to register/deactivate your unit(s), or if the new fee applies to you, visit mass.gov/masstaxconnect or call (617) 887-6367 or toll-free in Massachusetts at (800) 392-6089, Monday through Friday, 9:00 a.m. to 4:00 p.m.
PLEASE NOTE OUR OFFICE DOES NOT HAVE ACCESS TO YOUR MASSTAXCONNECT ACCOUNT OR TOWN OF NANTUCKET GOVOS REGISTRATION PORTAL: As your Intermediary, we collect and file your Room Occupancy Excise Tax returns each month, however, we do not have access to your state or town online accounts. We do not have the ability to view, update or change the status of your rental units nor can we alter the tax amount determined by the state at the time of filing. The calculation is automated through MassTaxConnect using the certificate number(s) you provide to our office. This makes it imperative that our office is collecting the correct amounts from tenants prior to check-in or else you, as the homeowner, are responsible for paying any additional amounts owed.
