Ocean City Eyes Process To Monitor Airbnb Properties

OCEAN CITY — Enforcement could be the key to minimizing the potential impact of Airbnb and other similar short-term rentals in Ocean City that aren’t likely remitting the requisite room tax, resort tourism officials concluded this week.

Throughout the summer, the Tourism Committee has attempted to gain a better understanding of the impact of Airbnb and similar companies that provide an online platform for connecting visitors to accommodations in the resort. Airbnb and other Internet sites enable property owners to rent homes, apartments and even single rooms to visitors searching online for accommodations.

On Monday, the Tourism Committee renewed the debate and attempted to map a strategy for regulating the online short-term rental craze. Ocean City officials are already keeping close tabs on potential legislation likely to be introduced in the Maryland General Assembly during the upcoming session.

Concerns have been raised about the impact on the traditional rental market in Ocean City, and perhaps more importantly, the vast amount of room tax that goes uncollected.

Worcester County collected over $13 million in room tax last year, largely derived from Ocean City, but that figure could take a substantial hit if Airbnb and similar companies come in and take a sizable portion of the rental market without collecting or remitting the requisite sales and room taxes.

Jurisdictions across Maryland and all over the country are wrestling with how to regulate the burgeoning short-term rental industry to ensure the appropriate tax revenue is being collected by governing bodies.

Property owners pay Airbnb and similar companies a percentage of the rent collected to list their homes, while the renters themselves often pay a larger percentage to the companies for the service provided.

While the collection of the requisite room and sales tax is considered paramount, there are also concerns about the impact on rental inventory for the traditional short-term vacation rental companies in the resort, according to Greater Ocean City Chamber of Commerce President-Elect John Gehrig.

“We have a tax collection issue, but a bigger issue for us could be inventory,” he said. “We have to be enforcing this and we have to be aggressive.”

Convention Center Director Larry Noccolino said Ocean City could take its cue from other jurisdictions battling the same issue with the short-term online rental companies.

“Montgomery County has gotten really aggressive with it,” he said. “They’ve had a big problem.”

Tourism Committee Chair and Council member Mary Knight said enforcement can be challenging because the Airbnb listings don’t include street addresses. She said it would take a considerable amount of homework to track the listed properties and ensure they are remitting the appropriate taxes, but it could and is being done.

“We’re working on coming up with a process,” she said. “You see a property listed on Airbnb but it doesn’t have a street address. We need to get a process in place where we can check and see if they have a rental license and see if they have a business license.”

It’s important to note it is the property owner’s responsibility to remit the appropriate room tax to the county for short-term rentals. To be fair, the Airbnb site does say “additional fees apply and taxes may be added.” In the meantime, Ocean City officials continue to monitor the situation with one or more bills likely to be introduced and debated in the upcoming General Assembly session.

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.