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HB 5204

AN ACT DEDICATING A PORTION OF THE ROOM OCCUPANCY TAX ON SHORT-TERM RENTAL PROPERTIES TO MUNICIPALITIES.

2026 Regular Session Introduced by Aundré Bumgardner

Connecticut bill redirects portion of short-term rental room occupancy tax revenue from state to municipalities to address local impacts and infrastructure costs.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#municipalities #short-termrentalproperties
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WeVote Research Nonpartisan
Bill Summary · HB 5204

Legislative bill overview

HB 5204 proposes to redirect a portion of Connecticut's room occupancy tax (the tax levied on short-term rental properties) to municipalities where those rentals operate. Currently, room occupancy tax revenue flows to the state; this bill would allocate some of that revenue directly to local governments.

Why is this important

Short-term rentals like Airbnb properties create local impacts—increased wear on infrastructure, parking pressures, and neighborhood effects—yet municipalities receive no direct tax revenue from them. This bill addresses the fiscal imbalance by enabling communities to fund services or offset costs related to short-term rental activity in their jurisdictions.

Potential points of contention

  • Revenue allocation formula: How much of the tax goes to municipalities versus the state, and how is it distributed fairly among communities with different rental densities?
  • State budget impact: Redirecting tax revenue from the state general fund may reduce funding available for state-level priorities unless offset by other sources.
  • Short-term rental industry concerns: Hosts and platforms may oppose tax increases or reallocations as additional operating costs that could be passed to consumers or reduce profitability.
  • Definition and compliance: Establishing clear criteria for what qualifies as a "short-term rental property" and ensuring accurate tax collection across multiple platforms adds administrative complexity.

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

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