Counties & Municipalities Alike Support Fair Taxation of Online Rental Platforms

MACo Executive Director Michael Sanderson testified in support of legislation (HB 935) that would require facilitators that coordinate the sale or use of accommodations between guests and hosts, like from Airbnb and VRBO, to collect and remit the state sales tax and local hotel rental taxes. The bill relieved the individual host from the responsibility, placing that onus on the intermediary company.

Testimony for this “host friendly bill” states,

According to a recent study by the Penn State University School of Hospitality, nearly 40 percent of the revenue generated on Airbnb is attributed to users who rent multiple units, and nearly 30 percent of the total revenue generated is derived from hosts who operate rentals fulltime.

Online rental platform use represents a significant growing sector of the hospitality industry, and in the interest of fairness, it should be treated as such for taxation purposes. Counties depend on local hotel rental taxes to fund essential public services, collecting just over $110 million throughout the state annually. Applying this existing tax to online rental platform users promotes fairness and helps support education, public safety, and needed community services.

The cross-file to the bill, SB 93, was heard by the Senate Budget and Taxation Committee on February 1, 2017. Joining Mr. Sanderson in support of this bill was Bill Jorch from the Maryland Municipal League (MML).

Useful Link

Conduit Street coverage of SB 93

Follow MACo’s advocacy efforts during the 2017 legislative session here.