Town’s Plans To Increase Room Tax Put On Hold

SNOW HILL – The Town of Ocean City’s plans to increase room tax have been put on hold until next year.

Though the Worcester County Commissioners agreed in January to ask the state for the ability to raise the room tax – an  initiative pushed by the Town of Ocean City – they confirmed this week it would not happen this legislative session.

“It’s something that’s probably going to be looked at next year,” said Commissioner Joe Mitrecic.

After increasing the room tax from 4.5% to 5% in 2019, resort officials last year asked the county to seek the authority to raise the room tax to up to 6%. In January, the commissioners agreed to ask for a change in state law that would give the county the authority to increase the tax. As Del. Wayne Hartman prepared the legislation, however, officials learned that the proposed change would need the support of three other Eastern Shore counties – Kent, Caroline and Queen Anne’s. That’s because Worcester is a code home rule county. While that gives the county broad legislative authority, under the state’s constitution code counties are not allowed to levy any tax without a general law enacted that applies to all code counties in their class. Worcester is clustered with Kent, Queen Anne’s and Caroline counties. As a result, the county needs their support on the legislation.

“By the time we got working on this there was not enough time to build the consensus we need,” said Weston Young, the county’s chief administrative officer. “We will be working with our fellow code home rule counties on the Eastern Shore to try to make this bill successful during the next legislative session.”

When asked why this wasn’t an issue the last time room tax was raised, Mitrecic said it was because at that time, moving from 4.5% to 5%, the county’s 5% room tax cap wasn’t being exceeded.

“In order for that cap to be moved, we’re a code county, we have to have the concurrence of the other code counties on the Eastern Shore,” he said. “We cannot ask for a change in the legislation unless they agree also.”

Ocean City Mayor Rick Meehan said at a meeting Tuesday the resort would work with the county to be ready for the next session. Meehan was asked if there was hope for getting the room tax increase in place for 2024.

“If we get this passed and the state approves it in the next legislative session,” he said. “That’s the reason we wanted to authority to go to that level, so when we were ready to do it, we could do it on January 1 so it would not throw everything out of balance. In all likelihood, if we get the concurrence during the next legislative session, the earliest we could pass that would then be January of 2024. That’s more realistic.”

(Managing Editor Shawn Soper contributed to this story.)

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.