OCEAN CITY — A requirement for short-term online vacation rental listings to include a business license could be extended to all rental listings in Ocean City after a spirited debate this week.
For well over a year, Ocean City officials have been monitoring short-term vacation rentals in the resort brokered by online platforms such as Airbnb and VRBO, for example. The intent is to ensure the hundreds of short-term vacation rentals listed on sites like Airbnb and VRBO, among others, are acquiring the requisite business license and collecting and remitting room tax.
The concern has largely been on two fronts including the apparent lack of business licenses for the hundreds of online vacation rentals in addition to the lack of room tax remittal for those that do acquire the requisite business license. The companies enable property owners to rent homes, apartments and even single rooms to visitors searching on-line for accommodations by bypassing the traditional rental companies.
Last week, Planning and Community Development Director Bill Neville told the tourism commission he and his staff had cursory meetings with Expedia, which is the parent company for online short-term rental platforms such as VRBO and HomeAway about requiring the companies to attach a business license to their listings to help ensure the appropriate room and sales tax.
According to Neville, Expedia has essentially agreed to have their online short-term vacation rental platforms list the business license for the properties, but would not do so unless it was required by a city ordinance. To that end, the tourism committee forwarded a favorable recommendation to the Mayor and Council to direct staff to begin exploring an ordinance change to require the inclusion of a business license for short-term vacation rentals through sites such as Airbnb and VRBO, for example.
On Monday, the council was prepared to vote on the measure and instruct City Manager Doug Miller and City Solicitor Guy Ayres to begin crafting an ordinance change. However, what appeared to be a slam dunk was altered somewhat by concerns the ordinance should require all vacation rentals in Ocean City to include business license information in their listings.
“Why don’t we consider any rental advertised in Ocean City?” said Councilman Wayne Hartman. “Whether it is in the paper or on craigslist or whatever, they should have rental licenses. We should require all rental ads to include the business license. Can we do that legally?”
Ayres said it was likely a good idea to have all rental properties listed in Ocean City include business license information.
“Yes, you can and you probably should,” he said in response to Hartman’s question. “You should treat all rentals the same.”
However, Councilman John Gehrig said he thought that approach was over-reaching and said established vacation rental companies should not have to include business license information on their listings.
“The rental agencies are established,” he said. “They have to abide by the rules as they apply to them. They already follow the rules, they pay taxes and they employee people. Some vacation rental agencies post rentals on their listings and they would already have to post their business license.”
Mayor Rick Meehan, who is also a Realtor, said that might not always be the case.
“This should be a requirement for all rentals,” he said. “I understand t Councilman Gehrig’s point, but I’m not sure it’s a requirement already. It’s the responsibility of the owner to collect and remit room tax and I think this should apply to everybody. We’ve had cases where properties offered by rental companies haven’t required a business license.”
The council voted 7-0 to have staff begin crafting an ordinance that would require all rental properties to include business license information.