Some Delaware Beach Towns Formally Oppose Proposed Lodging Tax - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Some Delaware Beach Towns Formally Oppose Proposed Lodging Tax

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(Photo: WBOC) (Photo: WBOC)

SUSSEX COUNTY, Del. - The towns of Fenwick Island, South Bethany, Bethany Beach and Lewes have officially opposed a proposed bill that would increase taxes on short-term rentals.

House Bill 130 would add an 8 percent tax to short term rentals such as Airbnbs, bed and breakfasts, and even campgrounds. Fenwick Island, South Bethany and Bethany Beach have sent letters to the bill's sponsors voicing their disapproval, saying they fear it will drive away tourists. Lewes passed a resolution officially opposing the bill. Dewey Beach has not taken an official stance, nor has Rehoboth Beach, however the latter is sending a letter asking for clarification on the bill. Rehoboth Beach Commissioner Paul Kuhns says chief concerns include how the tax will be collected, and if the proposed 8 percent will replace or be on top of the current rental taxes that vary by city. Bethany Beach's short term rental tax is 7 percent, while in Rehoboth Beach, it's 3.

"Will it be 8 percent and then it gets knocked out, will it be 8 percent added on to the 3 percent?" asks Commissioner Kuhns. "Does it prohibit us from thinking about raising our 3 percent if we have needs?"

Bethany Beach Mayor Jack Gordon says if the tax is added onto existing city taxes it could make vacationing in Delaware too expensive for tourists. Some tourists WBOC spoke with agreed.

"The downside would be that you would discourage more tourism," says Kathleen White from Arlington, Virginia. "Tourists do frequent the restaurants, they buy clothes, they buy souvenirs, they come and spend money."

Others said it could impact locals who choose to rent out their homes.

"To stay competitive, if locals are forced to lower their prices because of the built in tax, that's gonna take a bite out of profits for locals," says Flora Ingra from Westchester, New York.

The bill's sponsors-- Rep. Deborah Hudson and Sen. Gary Simpson--did not respond to WBOC's request for comment. A past analysis said the bill could generate $11 million in revenue for the state, and some Rehoboth Beach commissioners pointed out the tax would make things fair between private renters and companies like hotels and motels.

For more on the bill, click here

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