General Assembly Adopts MACo-Backed Delay of Tax Overhaul for Airbnb-Type Rentals

The General Assembly passed legislation this year to shift how Maryland collects hotel rental taxes from short-term rental (STR) platforms. SB 979 / HB 1103, as enacted, centralizes tax collection for qualifying platforms under the Office of the State Comptroller, aiming to improve enforcement and ensure short-term rentals (STRs) contribute fairly to local revenues.

At MACo’s urging, lawmakers delayed the bill’s implementation until fiscal 2027, providing time to resolve administrative details, coordinate across jurisdictions, and ensure local governments retain the tools they need to manage STR compliance.

Why This Matters

STRs — typically residential properties rented for fewer than 30 days — have proliferated across Maryland. Online platforms like Airbnb and Vrbo connect property owners with travelers, but often decline to share property-level data with local governments. That refusal undermines local efforts to enforce zoning, safety, and licensing rules, and complicates tax enforcement.

Counties rely on hotel tax revenues to support tourism, economic development, and essential services. Some counties have established voluntary collection agreements with STR platforms, allowing the platform to collect and remit hotel tax on behalf of hosts.

But many counties do not have such contracts, and in those jurisdictions, transactions continue without tax revenue. That gap creates inequity across the state and results in lost revenue for counties providing the same services and tourism support.

 A centralized, State-run tax collection system will help solve these problems if implemented with local needs in mind.

MACo’s Position and Amendments

MACo supported the concept but pushed for amendments to ensure counties retain tools to enforce compliance and track revenue. Counties called for:

  • License verification — platforms must report whether hosts are registered locally
  • Property-level reporting — to reconcile collections and identify noncompliant operators
  • Preserved audit authority — to prevent underreporting and revenue loss
  • Timely/Direct Distribution from the Comptroller to Counties and Municipalities — to ensure timely delivery to all local governments
  • Uniform standards — so large and small platforms follow the same rules

The General Assembly responded by adopting several of these priorities and extending the implementation timeline to allow for technical coordination.

What the Bill Does

As enacted, the bill:

  • Requires qualifying STR platforms — those with at least $100,000 in annual sales or 200 or more booking transactions — to collect and remit local hotel rental taxes to the Comptroller, rather than directly to each county or municipality.
  • Directs the Comptroller to establish procedures for reporting, distributing, and enforcing the new structure across all jurisdictions.
  • Requires direct distribution to counties and municipalities, ensuring timely delivery to all local governments.
  • Strikes language that would have prohibited the Comptroller from auditing STR platform data.
  • Requires the Comptroller to provide counties with tax remittance data sufficient to help verify hotel rental tax liability and reconcile collections.
  • Authorizes the Comptroller to retain up to 1.5% of local tax revenues to cover administrative costs.
  • Preempts local tax collection systems for covered platforms beginning January 1, 2028, creating a uniform State-level process.

Why the Delay Matters

The General Assembly adopted a delayed implementation date of July 1, 2027, giving local governments, the Comptroller, and stakeholders time to:

  • Establish transparent data-sharing and reporting protocols
  • Coordinate system and administrative processes across jurisdictions
  • Clarify compliance roles and enforcement responsibilities
  • Prevent confusion, gaps in collections, or loss of oversight at the local level

The delay gives all parties time to work through the mechanics of this significant change and build a system that improves tax administration while ensuring accountability locally.

What’s Next

MACo will continue working with the Comptroller’s Office and legislative leaders to ensure the new structure reflects local priorities — transparency, compliance, and reliable revenue distribution.

Counties support a streamlined and effective tax collection process for STRs, but it cannot come at the expense of necessary local authority or transparency.

Stay tuned to Conduit Street for more information.