- Associated Press - Tuesday, June 16, 2015

PROVIDENCE, R.I. (AP) - The House of Representatives voted Tuesday to expand the definition of hotel to include small bed-and-breakfasts, private home rentals and other rentals and to levy a new sales tax on these vacation rentals, despite efforts from some lawmakers to delay the tax.

State lawmakers approved a section of the budget expanding the definition and creating the tax with a 58-14 vote.

The proposed new sales tax on vacation rentals is expected to generate $6.9 million in additional revenue in fiscal year 2016, with $5.4 million of that coming from taxes on private vacation home rentals. The tax would go into effect July 1.

However, some lawmakers said they’d received phone calls and emails from constituents who were concerned that the tax would create an administrative nightmare as they’re in the midst of renting out their homes for the summer.

“The two-week turnaround time is going to be tough,” said Rep. Teresa Tanzi, a Democrat from Narragansett.



Tanzi said she had received at least 300 emails and phone calls from constituents, some of them “very angry.”

Republican Rep. Antonio Giarrusso of East Greenwich said he had received at least 150 emails from concerned constituents. His effort to delay the tax until Jan. 1 was unsuccessful.

House Finance Committee Chairman Raymond Gallison said renters who sign a contract before July 1 to rent a private home would not have to pay the tax. Contracts signed after July 1 would be subject to the tax, he said.

Also in the House plan, regional tourism bureaus would get less money from the state lodging tax, with the money redirected to help fund a statewide tourism plan.

The proposal now heads to the Senate.

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