GOV REVERSES ON AIRBNB TAX
Baker says he made ‘mistake’ backing plan
Gov. Charlie Baker, backpedaling from his initial support of a proposal to tax Airbnb rentals, said yesterday he made a “mistake” in backing the Senate proposal, which caught tax-wary Republicans by surprise and pushed the governor to reassert his fiscal conservative cred. “If anybody thinks I’m walking back my no-new-taxes view of the world, they’re mistaken,” Baker told reporters yesterday amid repeated questioning of his stance on taxing the short-term rentals. “I guess my answer would be I’m not interested in raising taxes. I am interested in leveling playing fields. At this point in time, on this particular issue, those two things seem to be in conflict,” he said. Baker set off alarms with some tax wa tc hdogs late last week when, during a radio interview, he said he’d back Senateapproved legislation that would apply the 5.7 percent hotel excise tax on Airbnb and other services — which the governor framed as a “level-playingfield issue.”
The revenue generated, estimated to be at least $20 million, would go toward paying for a bump in the earned income tax credit, which Baker supports and under the proposal would cost roughly $50 million.
But Baker quickly reversed himself, releasing a statement that said he was now concerned that it “would impose burdensome taxes and government bureaucracy” on people seeking vacation rentals and would only pay for roughly half of the increase to EITC.
The Swampscott Republican has repeatedly backed other measures, such as phasing out the state’s film tax credit, to help pay for expanding the EITC.
Baker yesterday expounded on his mea culpa, saying he had “commented on something I hadn’t read.”
“Lesson learned,” Baker said. “... I made a mistake.”
He later added: “My position at the moment is 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.”
Even with the reversal, Baker gave some reason for concern. Grover Norquist, the founder of Americans for Tax Reform, told the State House New Service after addressing Bay State Republicans in Cleveland that “you have to worry” if Baker doesn’t commit in writing to swearing off new taxes.
“He’s given us some fits and starts,” said Chip Faulkner of Citizens for Limited Taxation, which unsuccessfully pushed Baker to sign the no-new-taxes pledge he had committed to during his first unsuccessful run for governor in 2010.
“I think he’s solid with us. But sometimes he takes a look-see approach to some of these things, and we like our flat-out condemnation of a new tax,” said Faulkner, who was happy to hear Baker reversed his stance on the rental tax. “We agree with him. He’s following through on the (previous) pledge.”
The Senate proposal, which is currently tucked into a larger economic development bill that’s before a House-Senate conference committee, had drawn support from the Massachusetts Municipal Association, which said those in the growing Airbnb market were getting a competitive edge over local hotels and bed-and-breakfasts.
State Senate President Stanley C. Rosenberg, who is in Philadelphia for this week’s Democratic National Convention, said in a statement he was “disappointed” by Baker’s new stance. “I believe his support for both a tax on Airbnb and increasing the Earned Income Tax Credit will allow us to work out a solution to get to what Governor Baker and I have agreed we need to do: help working families by continuing to raise the Earned Income Tax Credit to 30 percent,” he said.