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Committee reviews municipal option to levy 1% short‑term rental tax; staff to refine charter conflicts
Summary
The committee considered a draft allowing municipalities to impose a 1% tax on short‑term rentals via local vote, clarified collection and use options, and asked staff to check for conflicts with existing local charters and state surcharges.
The committee reviewed draft language that would allow a municipality’s legislative body to place a warrant article asking voters to approve a 1% municipal tax on short‑term rentals. Cameron Wood explained the draft would follow local option tax procedures: "By a majority vote of those present and voting, the legislature of the municipality may assess a 1% tax on short term rentals as that term is defined in '24 BSA 22 90.'"
Members asked whether the tax would be collected as a meals and lodging tax, a local option tax, or be directly assessed by municipalities; Wood described alternatives and noted some larger municipalities (for example, Burlington) already have charter authority to tax short‑term rentals. The committee discussed how municipalities could use proceeds; Wood explained that if the tax went into a town general fund it would likely lower the municipal portion of a property tax levy and that local option taxes are typically used for capital improvements.
Committee members asked staff to cross‑check the draft against towns' charter authorities and to confer with tax staff and Kirby (tax counsel) about whether it should be implemented as a local option tax or as a municipality‑levied tax. Wood said those issues would be referred to tax counsel and that he would include the topic in a memo to relevant staff. The committee did not take a final vote and left the provision in the draft for further refinement and coordination with tax counsel and other committees.
