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HB 5416

AN ACT CONCERNING THE REGULATION AND TAXATION OF SHORT-TERM RENTAL PROPERTIES AND THE DEDICATION OF A PORTION OF THE ROOM OCCUPANCY TAX FROM SUCH RENTALS.

2025 Regular Session Introduced by Aundré Bumgardner and 5 co-sponsors

Connecticut establishes state regulation of short-term rentals and dedicates a portion of room occupancy tax revenue from such properties to an unspecified dedicated purpose.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#fees #short-termrentalproperties #tourismfund
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Bill Summary · HB 5416

Legislative bill overview

HB 5416 establishes a regulatory framework and taxation system for short-term rental properties in Connecticut, while designating a portion of room occupancy tax revenue from these rentals for a dedicated purpose. The bill creates state-level oversight of the short-term rental market, which has grown significantly through platforms like Airbnb and VRBO, and directs a share of tax proceeds toward an unspecified allocation.

Why is this important

Short-term rentals have transformed housing markets in many communities, reducing long-term rental stock and affecting affordable housing availability while generating tax revenue. This legislation attempts to balance economic activity with community concerns by establishing consistent state rules rather than leaving regulation entirely to municipalities. The dedicated tax revenue provision suggests lawmakers intend to use STR-generated income to address housing or tourism-related priorities.

Potential points of contention

  • Housing supply impact: Tenant advocates worry regulation legitimizes STR expansion, further reducing affordable housing stock; property owners argue restrictions limit investment returns and property rights
  • Local control versus state preemption: Municipalities may resist state-level rules that override local zoning and occupancy limits already in place
  • Tax revenue allocation: Dispute over where dedicated room occupancy tax proceeds should go—affordable housing funds, tourism promotion, community services, or general coffers—and whether the burden falls fairly on STR operators versus traditional hotels

Compiled from official sources — confirm details with the bill’s official record.

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