SNOW HILL – The Worcester County Commissioners introduced a bill this week that will allow for an increase in the room tax rate.
On Tuesday, the commissioners agreed to introduce a bill that will permit a maximum room tax rate of 5%. Ocean City Mayor Rick Meehan approached the commissioners last month seeking an increase in the rate, which is currently 4.5%.
“In his presentation on March 19th, Mayor Meehan stated that, even by raising the room tax to 5%, it would still be far less than room taxes charged by similar resort areas, and this expense would be passed on to consumers and generate additional needed revenue to cover the increase in special event costs,” reads a report provided to the commissioners by Assistant Chief Administrative Officer Kelly Shannahan.
Shannahan told the commissioners that if they agreed to introduce the legislation that would enable the county to increase the room tax rate, a public hearing on the legislation would be set for May 21. If the bill is adopted following the public hearing, it would become effective 45 days later. At that point, the commissioners would introduce a resolution to increase the room tax to 5% effective Jan. 1, 2020. After a public hearing on Aug. 20, that resolution would need to be approved by the commissioners.
“It would require unanimous adoption by the county commissioners to become effective,” Shannahan said.
According to information provided to the county by Meehan, Ocean City’s room tax rate is lower than the rates in other vacation destinations. Meehan reported the room tax was 8% in Rehoboth Beach, 8.5% in Philadelphia, 6% in Annapolis, 8% in Baltimore, 13.625% in Atlantic City and 14.95% in Washington D.C. He told the commissioners last month that the local rate hadn’t been adjusted in the last decade.
“What we would like to do is raise the room tax to be used for tourism related issues only, for destination marketing, for economic development, for special events, and to offset the costs of operating and having those special events on a year-round basis in Ocean City,” Meehan said in March.