Room Tax Bill Concerns Owners

Resort business leaders this week were urged to rally against a bill introduced
in the Maryland General Assembly which, if approved, would allow municipalities
such as Ocean City to add its own tax on hotel and motel rooms rented exclusive
of state and county taxes already collected.

Carousel Hotel
and Resort Managing Partner Michael James brought the bill to the attention of
the Economic Development Committee (EDC) during the group’s monthly meeting on
Wednesday. Senate Bill 402, introduced by a group of denators from Montgomery
and Prince George’s counties, would allow municipalities to levy a room tax not
to exceed 3 percent on all motel and hotel rooms rented within the municipality.

The bill would
essentially allow municipalities to tack on their own room tax in addition to
the taxes on rooms already collected by the county and state. James said the
legislation could have a profound effect on towns like Ocean City where the
economy revolves largely around the tourism industry.

Currently, the
county and state collect room tax on every public accommodation rented in Ocean
City and throughout Worcester County and some of the money is returned to the
municipalities in the form of grants and services provided. Senate Bill 402,
and the cross-filed House Bill 518, would allow the towns to collect their own
room tax with a cap of 3 percent in addition to the tax already collected by
the state and county.

“This is a
crazy bill and it singles out hotels,” James told EDC members on Wednesday.
“This is flying under the radar, but I think the EDC should take an active role
in trying to defeat this.”

James said
Senate and House bills seem to ignore the general public’s interest in how much
it costs to rent a hotel or motel room and disregards the potential impact on
the bottom line for most guests. Tacking on an additional three percent might
seem small to state lawmakers, but the measure could have a huge impact on the
hospitality business.

“There’s this
feeling that our guests have no resistance to rate increases, but we know
better than that,” he said.

EDC member
Lauren Taylor agreed visitors to the resort are increasingly conscious about
the taxes and fees added to motel and hotel rooms. In the highly competitive
tourism business, adding 3 percent to a room rate could be the deciding factor
for a family choosing one resort over another.

making reservations, most families want to know exactly what they are going to
pay,” she said. “They are very conscious of the bottom line.”