OCEAN CITY – With little discussion, resort officials this week approved on first-reading an ordinance aimed at ensuring all rental properties in Ocean City are acquiring the appropriate rental business license and remitting room tax.
The Mayor and Council had before them on Monday an ordinance for first reading intent on shoring up the rental license and room tax remittance issues. For the last few years, Ocean City has been working on code changes that will help ensure all rental properties in the resort are acquiring rental licenses regardless of how the properties are rented, whether it’s through a traditional rental agency, online or through the proliferating third-party platforms such as Airbnb, VRBO or similar internet sites. The second part of the equation is ensuring rental properties are remitting room tax and sales tax, which are sent to the county and come back to the resort based on an established formula.
Resort staff has been working with Worcester County officials on both sides of the equation in an effort to make sure the rental housing codes for both jurisdictions jibe. Heretofore, the town and county rental codes have not been in synch. With the changes the county has made, there is now an opportunity to alter that and make sure licenses are being acquired and room tax is being collected, especially with the non-traditional rental formats.
The changes presented in the ordinance on Monday include that requirements would apply to all housing types, and rental advertisements would have to include the town’s license control number and require certification of tax payments. In addition, there are sections that apply to fines and penalties, according to Planning and Community Development Director Bill Neville.
“The Mayor and Council seeks to improve the compliance of all property owners, hosting platforms and property managers in obtaining the required license for rental housing units, and to assist with the collection of applicable room tax payment by Worcester County,” he said at a meeting late last month. “To address the unique challenges of monitoring and enforcing these requirements for properties advertised through internet services and social media, town code amendments are proposed to require that all advertisements include the town license control number assigned to each property owner.”
When the ordinance was presented for first reading this week, City Solicitor Heather Stansbury said there appears to be some willingness with the third-party platforms to comply with the spirit of the ordinance.
“Just this afternoon, Mr. Neville received a call from an Expedia representative,” she said. “We were happy to hear Expedia and VRBO are following this and appear happy to work with us.”
With little discussion, the council voted unanimously to approve the ordinance on first reading. Also presented for first reading on Monday was a companion ordinance that spells out the fines and penalties for not complying with the ordinance passed just moments earlier.
Under that ordinance, failure to comply with acquiring the proper business rental license, or failure to remit room tax would result in a municipal infraction. The fine for committing a municipal infraction, depending on the circumstances, would be no less than $25 and no more than $1,000. The council voted unanimously to pass the companion ordinance presented on Monday on first reading.
