Short Term Rental Bills Stall

OCEAN CITY- Resort officials this week continued to keep a close eye on legislation in the General Assembly that would tighten regulations for online short-term rental operations such as Airbnb, for example, but it appears the bills might not pass this year.

Ocean City officials for over a year have been monitoring the proliferation of short-term vacation rentals in the resort brokered by on-line platforms such as Airbnb, for example. The concern has largely been on two fronts including the apparent lack of room tax collection on one hand and the sanctity of the neighborhoods in which the short-term rentals are located.

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 across the U.S. and worldwide.

While it has been around for nearly a decade, the impact of Airbnb and similar companies started to make their presence felt in the resort around two years ago. State and local jurisdictions have been wrestling with how best to regulate the growing on-line rental industry to ensure it is one a level playing field with the traditional rental industry.

To that end, there are a pair of bills circulating in the General Assembly that would regulate the short-term rental industry and ensure the proper sales and rooms taxes are being remitted appropriately. However,  during the Tourism Commission meeting on Monday, Ocean City Hotel-Motel-Restaurant Association Executive Director Susan Jones said it didn’t appear the bills were getting much traction.

“The bill is stuck in a committee work group,” she said. “It looks like there is a lot of politics going on with it and it probably won’t pass this year.

Jones said while it didn’t appear the bills would pass before the session expires, at least one company said during a recent committee hearing it was not remitting the room tax.

“It doesn’t seem to me anything is going through this year,” she said. “What is interesting is Airbnb essentially admitted during a Senate Finance Committee meeting it was not remitting the room tax as required.”

It has been pointed out several times in recent months it is up to the property owner to acquire a rental license and remit the appropriate taxes, but Ocean City Chamber of Commerce Executive Director Melanie Pursel said that isn’t always happening.

“Airbnb is leaving it up to the homeowner to remit the room tax,” she said. “Whether they do or not is a different story.”

Councilman John Gehrig said Ocean City needed to continue to monitor the issue.

“Regardless of what happens in Annapolis, we still need to keep an eye on what’s going on right in our backyard,” he said. “We need to be sure we keeping an eye on this.”

Council Secretary and Tourism Committee Chair Mary Knight said there needed to be a stronger hammer for enforcement.

“There is a lot going on with identifying the properties that should have a business license,” she said. “We really need to look at increasing the fine. The fines are so low that they will pay the fine and keep collecting the rent. Everyone gets a packet and if they are going to rent they need to pay the tax, but many are choosing to ignore it.”

City Manager Doug Miller said there is an effort underway to identify the scofflaws.

“That’s going on now,” he said. “We are looking at the ones listing in Ocean City and we’re making sure they have a business license.”

Knight said the city should rely on citizens to be extra sets of eyes and ears.

“If your neighbor is renting, as them if they have a rental license,” she said. “That’s the way we’re finding a lot of them.”

About The Author: Shawn Soper

Alternative Text

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.