OCEAN CITY — Resort tourism officials last week continued the debate on the impact of Airbnb and similar companies, and it appears legislation will likely be introduced in the upcoming General Assembly session to address the growing issue.
Earlier this year, the Tourism Committee 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 similar Internet sites enable property owners to rent homes, apartments and even single rooms to visitors searching online for accommodations by bypassing the traditional rental companies.
During last Monday’s meeting, the Tourism Committee renewed the debate and learned from Ocean City Hotel-Motel-Restaurant Association Executive Director Susan Jones that at least one and possible two bills could be introduced in the upcoming General Assembly session to regulate the growing non-traditional rental industry in Maryland including Ocean City. Jones said the Maryland Lodging Association is working on draft legislation, as is Senator John Astle of Anne Arundel County.
“They are currently drafting legislation and Senator Astle has also drafted his version,” she said. “We’re waiting to see the draft legislation before we go anywhere with this.”
As Uber has changed the transportation industry, Airbnb is making remarkable inroads on the traditional rental industry with millions of available accommodations in thousands of cities and countries across the U.S. and worldwide. The property owners pay Airbnb and similar companies a percentage of the rent collected to list their homes, while the renters often pay a larger percentage to the company for providing the service.
In essence, Airbnb gets them coming and going, and the convenience and selection has turned it into a major industry. While it has been around for nearly a decade, the impact of Airbnb and similar companies started to make its presence felt in the resort two years ago.
Airbnb and other companies that offer online vacation rentals are becoming a major concern because of the impact on room taxes. 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.
It’s important to note it is the property owner’s responsibility to remit the appropriate room tax to the county for rentals under six months, but because there are so many and because of the proliferation of online rental companies and even vacation rentals by owner, many are likely not acquiring rental licenses or paying the required sales and room taxes.
Jurisdictions all over the country are in the process of adopting regulations to assure Airbnb and similar companies are remitting the appropriate sales and rental taxes. In Ocean City, however, it is the responsibility of the property owner.
As they wait and see what approach the legislature takes in Annapolis, city officials have been attempting to develop a means to identify which resort properties are being utilized as short-term rentals without the appropriate license.
“We’re working with the city manager to come up with a process or a method to track them,” said Council Secretary Mary Knight. “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 to see if they have a rental license and a business license.”
