Montgomery County Council Passes New Tax on E-Cigarettes, Clarifies Hotel Tax

The Montgomery County Council approved legislation during its meeting yesterday to impose a tax on e-cigarettes and clarify the application of the hotel tax on rooms book through online travel companies. As reported by the Washington Post,

Council members unanimously approved a 30-percent excise tax on the wholesale price of e-cigarettes. If signed into law by County Executive Isiah Leggett (D), who supports the measure, it will make Montgomery one of the first jurisdictions in the nation to impose such a levy.

…Montgomery officials say the tax could bring in from $1.5 million to $2.5 million annually, depending on the county’s success in collecting from online wholesalers, who account for between 30 and 50 percent of all sales.

The second bill extends the county’s definition of “hotel” or “motel” to include spare rooms or other private lodging travelers can book through Airbnb, HomeAway, Loft and other online services.

Such rooms would be subject to the county’s 7 percent hotel tax. Officials estimate that it would yield about $230,000 a year in revenue.

As previously reported on Conduit Street, Council Members also voted against further reducing the county’s energy tax by a 5 – 4 vote.