A bill before lawmakers would establish a statewide registry for short-term rental properties and give municipalities the option to impose an additional tax on those stays.
House Bill 5536, raised by the legislature’s Finance, Revenue and Bonding Committee, would require owners of short-term rentals — such as those listed on Airbnb and Vrbo — to register with the state and report activity data. The proposal also allows cities and towns to adopt a supplemental local tax of up to 2.75% on short-term rental stays.
The measure is scheduled to be discussed during a Finance, Revenue and Bonding Committee meeting Monday, which was set to begin at 9 a.m.
Supporters, including the Connecticut Conference of Municipalities, say the measure would give local governments better tools to manage a rapidly growing sector.
Municipal officials argue a statewide registry would improve transparency and enforcement, while the optional tax could generate revenue to address housing shortages and other local impacts tied to short-term rentals.
They also say requiring more detailed tax reporting by municipality would help ensure more accurate revenue distribution and planning.
The Connecticut Lodging Association also supports the bill, saying it would help level the playing field between traditional hotels and short-term rental operators.
In testimony, the group said hotels and other lodging providers are subject to extensive regulations and taxes, while short-term rentals are not always held to the same standards. A statewide registry would provide better data and oversight, while the optional local tax would give municipalities flexibility to respond to local impacts.
Opponents, however, warn the bill could create new administrative burdens and discourage tourism.
In testimony, short-term rental host Karen Etchells said the proposal would add “unnecessary bureaucracy” and increase costs for property owners who already collect and remit taxes through booking platforms. She also raised concerns that higher lodging costs could push visitors to other states and hurt local businesses that rely on tourism.
The Connecticut Business & Industry Association also opposes the bill, arguing it would create a fragmented tax structure and uneven treatment compared to hotels.
CBIA said allowing municipalities to set varying tax rates would complicate compliance and “distort competition” across the lodging sector.
Meanwhile, the Department of Revenue Services raised concerns about implementation, saying the bill would impose new enforcement responsibilities and administrative costs on the agency without clearly addressing underlying housing issues.
The measure comes as Connecticut, like many states, continues to weigh how to regulate short-term rentals amid concerns about housing availability, neighborhood impacts and tax fairness.
