Airbnb Tax Legislation Planned

OCEAN CITY — Resort tourism officials this week continued the debate on the impact of Airbnb and similar companies on the eve of the 2017 General Assembly session when at least one bill hoping to regulate the industry will be introduced.

Last year, the Tourism Committee began an extensive debate in the hopes of getting 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 for accommodations by bypassing the traditional rental companies.

Just as Uber has changed the transportation industry, Airbnb has rocked 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.

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.

The companies 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.

The property owners are responsible for remitting 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.

Last year, the Tourism Commission began exploring ways to regulate Airbnb and similar online vacation rental companies. On Monday, City Manager Doug Miller said Ocean City had reason to be concerned on several levels.

“From our standpoint, we have three main concerns,” he said. “Are they renting in areas with the proper zoning? Have the properties been inspected? Perhaps most importantly, are we collecting the appropriate room tax.”

At least one bill is expected to be introduced in the Maryland General Assembly session that began on Wednesday. Ocean City Hotel-Motel-Restaurant Association Executive Director Susan Jones said State Senator John Astle of Anne Arundel County has prepared legislation although it had not yet been introduced when the session opened on Wednesday.

“His area of concern is getting the tax collected,” she said. “He didn’t want to get involved in the zoning aspect because each jurisdiction is a little different and this would be a statewide bill.”

Councilmember and Tourism Commission Chair Mary Knight said the Town of Ocean City was exploring a multi-faceted attempt at enforcing Airbnb and similar companies.

“Our concern is we’d like to have a registry component with this bill,” he said. “If we can get a registry where the properties for rent on Airbnb for example are listed, we can handle a lot of this on our own.”

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.