OCEAN CITY – Officials say they will make another attempt at enabling legislation to allow the county to increase its room tax rate.
On Monday, City Manager Terry McGean told the Mayor and Council officials have been working with state elected leaders and the town’s lobbyist to reintroduce a bill in the 2024 General Assembly session that would allow Worcester and all other code counties to increase the hotel rental tax rate from 5% to 6%. While legislation failed to pass the Senate last year, he said he was hoping for a better outcome this coming year.
“The mayor and our lobbyist, we’ve been working with various state elected officials since that session to improve the bill’s chances of success,” he said, “and we will be reintroducing that bill in the 2024 session.”
In 2022, the Worcester County Commissioners, at the request of Ocean City, worked with state representatives to pass enabling legislation in the General Assembly that would allow the county to increase its room tax threshold. However, officials discovered the state constitution required Worcester to obtain approval from all other Eastern Shore code counties, including Caroline, Kent and Queen Anne’s counties.
“In 2022, we tried to get the state law changed specifically addressing Worcester County, to allow us to go up to 6%,” McGean explained. “Ultimately, legally, we were not able to do that. The State Department of Legislative Services told us we could not just carve out Worcester County. Any change had to apply to all four of the Eastern Shore code counties.”
To that end, Worcester worked to secure letters of support from all Eastern Shore code counties. And in the 2023 legislative session, a new bill was reintroduced that would enable Worcester, Caroline, Kent and Queen Anne’s to raise the room tax rate.
“The bill was put forward,” McGean told the council this week. “We received favorable reports, both from the House and the Senate subcommittees. Unfortunately, the bill ultimately failed in the Senate essentially for partisan reasons.”
With the next session just months away, McGean said officials are preparing to reintroduce the bill. He noted that the bill’s passage was the first of two steps.
“Once the state authorizes the ability to do it, state law also requires that the county approve any increase, and it has to be by unanimous vote of the county commissioners …,” he said. “We’re hard at work pursuing the first. Once we have the first, then there will be some work to be done to achieve the second.”
Should both actions occur, McGean said any increase in the room tax wouldn’t take place until January 2025.
