Legislative Analysis
Phone: (517) 373-8080
SHORT-TERM RENTALS
http://www.house.mi.gov/hfa
House Bill 5437 as introduced Analysis available at
Sponsor: Rep. Jason Morgan http://www.legislature.mi.gov
House Bill 5438 (proposed substitute H-1)
Sponsor: Rep. Joey Andrews
House Bill 5439 as introduced House Bill 5443 (proposed substitute H-2)
Sponsor: Rep. Amos O’Neal Sponsor: Rep. Mike McFall
House Bill 5440 as introduced House Bill 5444 as introduced
Sponsor: Rep. Jenn Hill Sponsor: Rep. Veronica A. Paiz
House Bill 5441 as introduced House Bill 5445 as introduced
Sponsor: Rep. Julie Brixie Sponsor: Rep. Noah Arbit
House Bill 5442 as introduced House Bill 5446 as introduced
Sponsor: Rep. Erin Byrnes Sponsor: Rep. Kristian C. Grant
Committee: Local Government and Municipal Finance
Complete to 4-17-24
SUMMARY:
Together, House Bills 5437 to 5446 would regulate and levy assessments on short-term rental
facilities in Michigan. House Bill 5438 would create a new act specifically pertaining to short-
term rentals, and the remaining bills would subject short-term rental facilities to the various
taxes currently levied on hotel rooms.
House Bills 5437 and 5439 to 5446 are tie-barred to House Bill 5438, meaning that none of
those bills can take effect unless HB 5438 is also enacted.
SHORT-TERM RENTAL REGULATION ACT
House Bill 5438 would create the “Short-Term Rental Regulation Act.” The new act would
create several regulations for a property offered as a short-term rental, including safety and
insurance standards, a requirement that a property offered as a short-term rental be registered
with the Michigan Department of Licensing and Regulatory Affairs (LARA) and included in a
short-term rental database, provisions allowing for limited local regulations on short-term
rentals, and additional fees and requirements for rentals listed on a hosting platform. It would
also establish a 6% tax for units rented 15 or more days in a year. The bill would take effect 60
days after it is enacted.
Short-term rental would mean the rental of a single-family residence, a dwelling unit
in a one-to-four-family house, or a unit or group of units in a condominium for up to
30 consecutive days. Short-term rental would not include the rental of a hotel, motel,
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 hotel condominium, 1 home, or condominium unit located within a resort that offers
amenities such as golf, a skiing restaurant facility, or group meeting accommodation.
Hosting platform would mean a digital platform, third-party website, software, online-
enabled application, mobile telephone application, or another similar electronic process
that allows for all of the following for a short-term rental located in Michigan:
• The advertisement, listing, or offer of the short-term rental as available.
• The collection of occupancy charges.
• The arranging, booking, reserving, or renting of the short-term rental.
Facility requirements
An owner could not offer a dwelling as a short-term rental unless it is equipped with a
functioning carbon monoxide detector, 2 a functioning smoke detector in each sleeping room,
and a functioning fire extinguisher on each floor.
Short-term rental owners would be required to maintain liability insurance of at least $1.0
million on each unit offered for rent that defends and indemnifies the owner and any tenants
for bodily injury and property damage. (This provision would not apply to short-term rentals
offered through a hosting platform that maintains equal or greater insurance coverage.)
An owner of a short-term rental would have to post the following information in a conspicuous
place in every room of the dwelling and as a single form in every bedroom:
• The owner’s emergency contact and a working phone number.
• Information regarding local emergency services, including a working phone number
for the local police and fire departments.
• The floor plan and escape routes.
Registration and short-term rental database
LARA would have to create a certificate to be filed by an owner of a dwelling each year they
offer the dwelling as a short-term rental that contains the following information:
• The name, current phone number, email, and address of the owner of the short-term
rental.
• The address of the short-term rental.
• Certification that the owner has the required liability insurance.
• Emergency contact information for a person who resides within 30 miles of the
dwelling.
• Certification that the owner has complied with all applicable local requirements.
A hosting platform would be prohibited from facilitating booking transactions for a short-term
rental located in Michigan if the owner has not received a certificate approval number from
LARA acknowledging that the certificate has been reviewed.
Booking transaction would mean a hosting platform’s facilitation of a short-term
rental transaction for compensation by enabling the reservation of a short-term rental
or by collecting or processing occupancy charges.
1
Hotel condominium would mean a group of units in a condominium or condominium projects rented by a common
rental management company for transient rental that may include a reception or check-in desk.
2
The carbon monoxide detector could be battery-powered, plugged in, wired into the property’s AC line with
secondary battery backup, or connected to a system though a control panel.
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 LARA would have to create, operate, and annually update a database of short-term rentals that
includes the information listed above, and the LARA director would have to prescribe any
forms necessary for the administration of the database. (The department could contract with a
third party to create the database.)
Upon lawful request, LARA would be required to share the information in the database for a
short-term rental with the local unit of government (defined by the act as a city, township, or
village) in which the dwelling is located, law enforcement agencies, and members of the public.
In sharing the information, LARA would also have to report the number of complaints received
against an owner for a violation of the Short-Term Rental Regulation Act and the action taken
in response to the complaint.
If a local unit of government revokes a short-term rental’s permit for a violation of a local or
zoning ordinance, LARA would have to remove it from the database.
Hosting platforms
The bill would require hosting platforms to have a current and valid registration on file with
LARA and pay an annual registration fee of $100 per listing (up to $50,000) in order to
facilitate booking transactions for a short-term rental located in Michigan.
LARA would have to issue a registration number to each hosting platform that meets the
requirements of the Short-Term Rental Regulation Act, pays the registration fee, and agrees in
writing to obtain written consent from all short-term rental owners in Michigan for the
disclosure of any required records and to remove from its listing a short-term rental that does
not comply with the act or reasonable local regulations.
Unless prohibited by a contrary law or administrative action, a hosting platform would have to
develop and maintain a report of the booking transactions it facilitates for short-term rentals in
Michigan, which would have to include the following records for each transaction:
• The full address of the short-term rental.
• The full legal name of the owner.
• As applicable, a current and valid permit, license, registration, or other related
authorization issued by the local unit of government in which the rental is located for
the dwelling’s use as a short-term rental.
• The calendar dates that the short-term rental was rented.
• The nightly rate for the rental and any taxes or assessments collected.
• The hosting platform’s compensation for facilitating the booking.
(The state treasurer would be responsible for establishing the form and manner of the report
and could require a hosting platform to include any additional information necessary to enforce
payment of the short-term rental excise tax, described below.)
Subject to any applicable laws, hosting platforms would have to provide the state treasurer with
monthly itemized records from the report for all booking transactions facilitated in the
preceding month. A hosting platform would also have to make the full report (excluding copies
of message exchanges between the hosting platform, the short-term rental owner, guests, or
other persons who booked the rental) available to LARA upon the LARA director’s request.
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 The itemized records within the report would have to be maintained by the hosting platform
for at least three years after the end of the calendar year in which a booking occurred.
LARA could audit a hosting platform’s report and itemized records as necessary.
Short-term rental excise tax
The act would levy an excise tax, known as the “short-term rental excise tax,” at 6% of the
occupancy charge for all short-term rentals in Michigan that are rented for more than 14 days
in a calendar year. The tax would be collected in the same manner and at the same time as use
taxes and would be in addition to any other taxes, fees, or assessments imposed by law,
including any hotel taxes.
Occupancy charge would mean the charge imposed for the use or occupancy of a
short-term rental, including cleaning and service fees. 3 The term would not include
charges for food, beverage, state use or excise taxes, telephone service, or a damage
deposit or damage insurance.
The state treasurer would administer the tax and would have to provide forms and promulgate
rules as necessary. Proceeds would be deposited in the state treasury and credited to a restricted
account.
Upon appropriation, 1% of the revenue would be distributed to LARA and the Department of
Treasury for the administration of the act, up to $1.0 million. The remaining amount collected
from each short-term rental would be distributed to the local unit of government in which the
rental is located.
An owner of a short-term rental could add the tax to the rental’s occupancy charge for a listing
facilitated by a hosting platform as long as the owner discloses the addition of the tax on the
guest’s bill or receipt.
Local regulations
With respect to short-term rentals, a local unit of government could enact and enforce
reasonable regulations and uphold zoning decisions that do any of the following:
• Safeguard the public health, safety, and welfare (including providing for fire safety
standards and blight mitigation).
• Determine the number of units allowed to be used as short-term rentals, including
geographical restrictions, and establish a process by which this number could be
adjusted.
• Establish a process by which the local unit of government could revoke a short-term
rental permit and by which a revocation could be challenged.
A local unit of government would be authorized to revoke a short-term rental’s permit for a
violation of a local ordinance or a zoning ordinance. However, a local unit of government could
not enforce an ordinance, rule, or regulation (including a zoning ordinance) that has the effect
of a total ban on short-term rentals and violates section 207 of the Zoning Enabling Act. 4
3
The occupancy charge would be the basis for the assessments imposed on short-term rentals under House Bills 5437
and 5439 to 5446.
4
Section 207 provides that a local zoning ordinance or zoning decision generally cannot totally prohibit a lawful land
use within a local unit of government if there is a demonstrated need for that land use in the local unit or surrounding
area.
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 When applicable, a hosting platform would be prohibited from facilitating booking transactions
for a short-term rental in Michigan if the rental and its owner do not have current and valid
authorization and registration from a local unit of government for the property’s use as a short-
term rental.
Penalties and LARA administration
For each violation of the act, LARA could order a short-term rental owner to pay a fine of up
to $1,000 and a hosting platform to pay a fine of up to $5,000. Fines would be transmitted to
the local unit of government where the short-term rental is located.
LARA would have to adopt rules and enforce standards for the issuance, renewal, suspension,
revocation, and appeal of hosting platform registrations, as well as standards for service of
process, notice, and demand.
COMPANION BILLS
House Bills 5437 and 5439 to 5446 would amend nine different acts, each of which generally
allows an assessment to be levied on hotel or motel room charges to fund the tourism
promotion efforts of a local or regional tourism bureau or marketing organization (often called
a convention and visitor bureau, or CVB). 5 Owners of these facilities can pass the assessment
on to guests as an additional room charge if they notify the guests that they are doing so. The
bills would extend the assessments to short-term rentals, reduce the minimum number of rooms
required for a facility to be subject to the taxes, and make other related changes.
Room charge currently means the charge imposed for the use or occupancy of a room,
excluding charges for food, beverages, state use tax, phone service or like services, and
reimbursement of the assessment (i.e., adding the assessment to customers’ bills). 6
The bills would amend the following acts:
• House Bill 5437: 1991 PA 180 (MCL 207.751 to 207.759), which allows an
assessment of up to 1% on rooms in facilities in certain eligible cities and counties.
• House Bill 5439: The Regional Convention and Tourism Promotion Act (2010 PA
254; MCL 141.1431 to 141.1437), which allows an assessment of up to 5% on rooms
in facilities with two or more guest rooms in Bay or Midland County.
• House Bill 5440: The Regional Tourism Marketing Act (1989 PA 244; MCL 141.891
to 141.900), which allows an assessment of up to 1% on rooms in facilities with 10 or
more guest rooms in the Upper Peninsula.
• House Bill 5441: The Community Convention or Tourism Marketing Act (1980 PA
395; MCL 141.871 to 141.880), which allows an assessment of up to 5% on rooms in
facilities with 10 or more guest rooms in counties with a population below 650,000 or
in cities, villages, or townships within such a county, except for some areas subject to
an assessment under the Convention and Tourism Marketing Act.
• House Bill 5442: The State Convention Facility Development Act (1985 PA 106; MCL
207.621 to 207.640), which allows an assessment of between 1.5% and 6%, based on
5
1991 PA 180 (which HB 5437 would amend) provides for an assessment on these facilities to fund stadiums and
convention centers, which is collected by a local government rather than a CVB.
6
The accommodations tax act (which HB 5443 would amend) instead refers to a “total charge for accommodations.”
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 the number of rooms and the location of the facility, in counties with a population
exceeding 700,000.
• House Bill 5443: The accommodations tax act (1974 PA 263; MCL 141.861 to
141.867), which allows an assessment of up to 8% on rooms in facilities in a county
with a population of less than 600,000 that contains a city with a population of at least
40,000 at the time it enacts the assessment and allows an additional assessment of up
to 2% on rooms in facilities in Kent County.
• House Bill 5444: The Regional Event Center Financing Act (2020 PA 340; MCL
141.1441 to 141.1445), which allows an assessment of up to 4% on rooms in facilities
with 35 or more guest rooms in Ingham, Kalamazoo, Muskegon, and Washtenaw
Counties.
• House Bill 5445: The Convention and Touris