Thinking about renting your Nantucket home for a few weeks or buying a place with rental potential? The island has clear rules, real taxes, and a few easy-to-miss details that can lead to fines. You want to host legally, protect your investment, and give guests a smooth stay. This guide breaks down what you must register, what you must collect, and how to stay compliant on Nantucket. Let’s dive in.
What counts as a short-term rental
A short-term rental in Massachusetts covers most dwellings rented for 31 days or less. If you rent a property for 14 days or fewer in a calendar year, you may qualify for a state tax exception, but you still need to register and follow local rules. You, your agent, and any booking platform have defined responsibilities under state law. For definitions and state guidance, review the Massachusetts Department of Revenue’s overview of the room occupancy excise.
Massachusetts room occupancy excise overview
The two registrations you need
1) State registration with DOR (MassTaxConnect)
You must register each rental property with the Massachusetts Department of Revenue on MassTaxConnect and obtain a state certificate number. Include this certificate number in your listings and provide it to any intermediary that collects rent. For tax purposes, the state treats most booking amounts as rent, including cleaning, linen, and booking fees.
See DOR guidance on registration and taxable rent
2) Nantucket’s local STR certificate (Board of Health)
Nantucket requires an annual short-term rental certificate from the Board of Health, issued through the Town’s GovOS portal. The application fee is $250 per unit and you must renew each year. You will upload your state certificate, proof of liability insurance (generally at least $1,000,000 per claim, or platform coverage that meets or exceeds it), and designate a local contact available 24/7 who can respond on site within two hours.
- Post required items in the home: certificates, emergency exit diagrams in bedrooms and on egress routes, trash and recycling instructions, and house rules.
- Include both the Massachusetts and Nantucket certificate numbers in any advertising or listing.
- Follow Town operating standards, reporting, and renewal timelines.
Review the Town’s regulations in Chapter 338 and the Town’s STR information page for the latest instructions.
Taxes and fees you may need to collect
At a minimum, Massachusetts imposes a 5.7% state room occupancy excise on short-term rentals. Cities and towns can add a local room occupancy excise up to 6%. Some properties may also be subject to a Community Impact Fee up to 3% and, where applicable, a regional 2.75% Cape Cod and Islands Water Protection Fund excise. The exact combination depends on the property and current local adoption.
- Always verify the current combined rate for your property before quoting totals to guests. The DOR’s regulation explains how these taxes and fees work and who they apply to.
- Check whether the Cape Cod and Islands Water Protection Fund excise applies to Nantucket at the time of booking since membership has changed over time.
830 CMR 64G.1.1 room occupancy regulation
Cape Cod and Islands Water Protection Fund overview
Who collects and remits
If you collect rent directly, you are responsible for collecting and remitting the tax through MassTaxConnect. If an intermediary such as a booking platform or a property manager collects rent, that intermediary may be responsible for remitting the tax for those bookings. You must still register with the DOR and provide your certificate number to any intermediary.
How collection and filing work under DOR rules
Key operating rules on Nantucket
Nantucket’s standards aim to protect health, safety, and neighborhood quality. Highlights include:
- Occupancy: two people per bedroom plus two additional people for the unit. Reflect this limit in your listing and on the guest information posted on site.
- Parking: ensure parking does not create safety issues or congestion. The Town can require a parking plan.
- Posting and guest info: display certificates, emergency exits, waste instructions, and house rules inside the property.
- Recordkeeping and reporting: keep stay records for at least three years and file quarterly electronic reports in the format the Board of Health requires.
Operating standards and reporting in Chapter 338
Filing deadlines and cadence
Room occupancy returns are filed electronically through MassTaxConnect, typically on a monthly schedule. Some DOR materials reference different due dates, and the regulation notes a monthly return that is due the month after the reporting period. Because instructions can change, confirm your due date in MassTaxConnect and follow the latest DOR notices for your account.
Return filing details in the DOR regulation
Penalties and enforcement on island
The Nantucket Board of Health is the primary enforcement authority, with support from other Town departments. Noncriminal fines can accrue daily and escalate from $100 to $200 to $300 for repeated offenses, and the Town may impose civil penalties up to $5,000 per violation. Repeated violations can lead to suspension or revocation of your STR certificate for up to three years, and the Town can seek injunctions where appropriate.
- Review enforcement provisions and prohibited uses in Chapter 123.
- The Town maintains a complaint hotline and publishes STR updates on its information page.
Nantucket Chapter 123: STR bylaw and penalties
A simple owner checklist
- Register with the DOR on MassTaxConnect and get your state certificate number.
- Apply for the Nantucket STR certificate through the Town’s portal; pay the $250 fee and upload your documents.
- Carry appropriate liability insurance and confirm the policy covers STR use.
- List both certificate numbers in your advertising and outline occupancy, parking, and house rules.
- Decide who will collect and remit taxes, then verify filings if an intermediary handles them.
- Keep required records for at least three years and submit quarterly reports to the Town if requested.
Buying with STR potential
If you are evaluating a purchase with rental income in mind, build compliance into your underwriting. Confirm what taxes and fees apply to that property type, whether you will meet the insurance and local contact requirements, and how occupancy and parking limits affect guest capacity. Nantucket’s policy landscape continues to evolve, so plan to review the Town’s STR page and DOR guidance before each season.
Town STR updates and resources
Ready to map out a compliant rental strategy or evaluate a property’s income potential on Nantucket? Reach out to John McGarr for local guidance, property selection, and concierge-level support from first viewing to first booking.
FAQs
Do I need both state and Nantucket registrations to rent short term?
- Yes. You must register with the Massachusetts DOR and also obtain Nantucket’s Board of Health STR certificate before operating.
What taxes could apply to a Nantucket short-term rental booking?
- Expect the 5.7% state excise plus any adopted local excise, possible Community Impact Fee for certain units, and, if applicable, the 2.75% regional fund excise.
Who remits taxes if I use a platform or manager?
- The party that collects rent remits the tax for those bookings, but you still must register and provide your certificate number.
What is Nantucket’s occupancy limit for STRs?
- Two people per bedroom plus two additional people per unit, which you must state in listings and on guest information.
How does the 14-day exemption work in Massachusetts?
- If a property is rented for 14 days or fewer in a calendar year, it may be exempt from collecting the excise for that year, though registration and local rules still apply.
What are the penalties for noncompliance on Nantucket?
- Daily fines can apply, the Town can assess civil penalties up to $5,000 per violation, and certificates can be suspended or revoked for repeated violations.
When are Massachusetts room occupancy returns due?
- Returns are filed through MassTaxConnect on a recurring basis, typically monthly; confirm your exact due date in the portal and follow DOR notices.
