Tax Meals, not Vacation Homes in Massachusetts

An editorial in the Boston Globe argues against the proposed vacation home rental tax.

A PROPOSAL by several Cape Cod towns to extend the 9.7 percent hotel tax to private vacation home rentals has ignited long-simmering tensions between year-round Cape residents and second homeowners. And it worries small-business owners who fear the new tax will depress tourism in an already down economy.

And is it fair? Innkeepers who compete with private rentals think so, but most second homeowners do not maintain full-time rental businesses, while they do pay property taxes and don’t typically use as many local services, such as schools.

A better idea would be for the Cape communities to join Boston-area officials who have been pushing for local-option meals tax legislation. It wouldn’t require a whole new enforcement mechanism to tack a penny or two on the existing meals tax; the burden would still fall mostly on vacationers; and it would be distributed more broadly: a 2 percent increase amounts to just a dollar extra on a $50 restaurant bill. That’s something most tourists could swallow.

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