by Palmer Lintz
In a significant development for Vermont’s short-term rental market, a new bill, H.887 (Yield Bill), has recently become law. Following the Legislature’s override of the Governor’s veto, the bill mandates that all short-term rental reservation transactions occurring after August 1, 2024, will be subject to a 12% Meals & Rooms Tax (MRT). This marks a notable increase from the current 9% statewide MRT.
Stayclass.com, Vermont’s local website for short-term vacation rentals, is committed to keeping property owners and guests informed about this crucial change. Below are key points for both groups to understand how this new tax will affect them.
What Property Owners Need to Know
As a property owner, it is crucial to understand the implications of this new tax law for effective planning and management of your rental business. Here are the essential details:
- Effective Date: The new tax rate will apply to all short-term rental transactions from August 1, 2024, onward. Any bookings made after this date will include the increased tax rate.
- Increased Costs: The additional 3% tax will affect your overall pricing structure. It’s vital to update your listings and inform potential guests about this change to prevent any surprises or misunderstandings.
- Communication: Transparency is essential. Ensure that your guests are well-informed about the new tax rate. Update your listing fee descriptions, communicate clearly during the booking process, and include this information in your rental agreements.
Palmer Lintz, co-founder and CEO of Stayclass, expressed his concerns about the new law. “It is unfortunate that this new tax law singles out short-term rental owners as the only contributors toward this increase. Hotels, Inns, restaurants, and all other Meals & Rooms Tax payers will remain at the 9% tax rate, while short-term rental owners will foot the bill for 12%.”
What Guests Need to Know
For guests planning to stay in one of Vermont’s beautiful short-term rentals, here’s how the new tax might impact you:
- Higher Costs: Starting August 1, 2024, the Meals & Rooms Tax for short-term rentals will increase to 12%. This means you can expect a slight increase in the overall cost of your stay.
- Booking Transparency: When searching for accommodations, check if the increased tax is included in the quoted prices. Most responsible property owners will update their listings to reflect the new tax rate, but it’s always good to double-check.
- Supporting Local Legislation: While paying higher taxes might not be appealing, it’s important to note that these funds often support local infrastructure, tourism initiatives, and other community benefits. Your contribution helps maintain Vermont’s charm and appeal.
- Planning Ahead: If you’re planning a trip to Vermont, consider booking your stay before August 1, 2024, to take advantage of the current lower tax rate. This can help you save a bit on your vacation expenses.
Lintz also highlighted the importance of compliance, despite his disappointment with the law. “While we at Stayclass are disappointed by the decision to increase the tax burden exclusively on short-term rental owners, we are committed to complying with the new law and ensuring our property owners and guests are well-informed.”
The implementation of the H.887 (Yield Bill) marks a significant change for the short-term rental market in Vermont. Property owners must adapt to the increased tax rate by updating their pricing and communicating clearly with guests. Meanwhile, guests should be prepared for slightly higher costs but can take comfort in knowing their contributions support the local community.
The author is co-founder and CEO of Stayclass.com and a member of the board of directors for the Vermont Short Term Rental Alliance.