Bill > SB5576

This bill provides a local government option for funding essential affordable housing programs by allowing counties, cities, and towns to impose a special excise tax on short-term rental lodging at a rate not exceeding 4%. The tax would exclusively apply to short-term rentals facilitated through rental platforms, with the collected funds dedicated to specific affordable housing initiatives. Local governments can use the revenue for acquiring or rehabilitating affordable housing, funding housing operations and maintenance, providing rental assistance, and supporting social service organizations focused on housing-related assistance. The bill requires local governments to adopt a resolution of intent and gain simple majority approval before implementing the tax, and mandates an annual public report detailing how the revenue was spent. Importantly, the tax cannot be imposed before April 1, 2026, and local governments may retain up to 15% of collected funds for administrative costs. The proceeds will be deposited into a newly created "essential affordable housing local assistance account" in the state treasury, with the state department handling tax collection at no cost to the local jurisdiction. The bill also makes technical amendments to existing tax laws to accommodate this new funding mechanism, ensuring consistency with current tax regulations.