Ocean City Today

OC keeps looking for means to collect room rental taxes

By Greg Ellison | Jan 11, 2018

(Jan. 12, 2018) Ocean City government continues to search for solutions to assure short-term rental properties advertised on websites such as Airbnb or VRBO are remitting required room and sales taxes.

Mayor Rick Meehan updated members of the Tourism Commission on Monday on how that effort has been going.

“Currently there are 9,000 rental units that have licenses [but] we’re not 100 percent sure if they’re all paying their room taxes,” he said. “We also know there are a large number of properties that are renting that don’t have licenses.”

Several months ago, Meehan said, a cross-check of online short-term rentals against city records found more than several unregistered properties whose owners were not paying the 4.5 percent room tax to Worcester County and 6 percent Maryland sales tax.

Back in September, Meehan said, 62 online listings and been identified and 15 of them were operating without a rental license. After being notified, 10 owners immediately obtained licenses and five others did so after being fined $500.

“This isn’t something we can do manually,” he said.

Recognizing assistance is required, Meehan said Finance Administrator Martha Bennett found three companies with the expertise, and computer software, to cross-check online rental platforms against city records.

“Martha had identified and has done interviews with them and will be making recommendations soon,” he said.

Meehan also said when rental license renewal forms are mailed, the required county paperwork is included.

“Just because you have a license, you haven’t totally complied if you’re not paying the room tax,” he said.

Contingent on City Council approval, Meehan proposed retaining professional assistance to assist in the data checking campaign.

“This is not something we can do in house,” he said.

In addition, Meehan said Ocean City would continue to ensure that short-term rental property owners obtain rental licenses and remit room and sales taxes.

“Whether you rent to your uncle, your brother or your sister, it doesn’t matter,” he said. “We’re doing everything we can to tell people [and] trust me they know.”

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