Ocean City Today

OC seeks county solution to Airbnb taxes

Mayor Rick Meehan wants meeting with Wor. admin to audit payment numbers
By Katie Tabeling | Sep 14, 2017

(Sept. 15, 2017) Ocean City Mayor Rick Meehan said the next step in checking whether online short-term rentals are following the resort rules is to see if their room tax has been paid into Worcester County’s coffers.

For the most part, companies such as Airbnb and VRBO are operating with a rental license in the resort. An additional 62 listings were uncovered in the last two months, but only 15 were operating without a permit.

That represents an increase in compliance of 76 percent. When notices were sent to the 15 unlicensed properties, 10 immediately got a license, according to Meehan.

The remaining five properties obtained licenses after receiving a $500 citation in the mail.

Despite this, Ocean City officials don’t know whether these rental properties are paying the required 4.5 percent room tax. Worcester County collects the tax on behalf of the resort and other municipalities.

Ocean City is projected to see $15.4 million in room tax for fiscal year 2018. Meehan said it is time to ensure that the resort is seeing its cut from the Airbnb operations.

“What I’d really like to do is set up a meeting with Harold Higgins [county administrator] and talk about this. We’ve been unable to cross-check this and see who’s paying,” he said during Monday’s Tourism Commission meeting. “The system needs to be updated.”

In July, Worcester County spokeswoman Kim Moses said there is no way to differentiate revenue from hotels and online short-term rentals.

Room tax unpaid or delinquent for one month from the due date will have a penalty of 10 percent of the bill. Interest at the rate of one half a percent of the bill will be added each month beginning of the month.

Meehan said he would also include Ocean City’s county commissioners representative, Commissioner Joe Mitrecic, in conversations in detangling the room tax revenue.

“The town does send a significant amount of funding in room and food tax. Some money could be invested to look into a different [computer system] that would really mine the data to address this,” he said. “The bottom line is about a level playing field.”

Ocean City officials are working on reviving legislation to regulate the online short-term rental business, but other commission members say that nothing viable has formed yet.

Councilman John Gehrig pointed out that even if the resort finds a way to force the Airbnbs to comply with resort regulations, there’s still the matter of competition.

“It’s not that they don’t want to be fair. They’ve outmaneuvered legacy operations and forced change with their daily bookings and cancellation policies,” Gehrig said. “If they have the license and paid the tax, we’d still have the same problem. The inventory would still exist … the challenge is technology is forcing change. That’s life.”

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