OCEAN CITY, Md. -- There is a possibility the hotel room tax in Worcester County increases from 5% to 6%. Lawmakers in Annapolis are considering legislation which would allow the county to increase the tax.
If it passes in Annapolis, it would still need a unanimous vote from the Worcester County Commissioners.
This increase would affect all hotel and rental properties throughout the county, according to Susan Jones, Executive Director of the Hotel Motel Restaurant Association in Ocean City.
"It's not something that just affects Ocean City, it will affect the hotel in Berlin, hotels in Pocomoke," said Jones. "So it is going to be county wide and then the county collects the tax and remits it back to municipalities."
For Worcester to be able to increase their tax, Kent County, Queen Anne's County, and Caroline County all had to give approval.
Ocean City's mayor, Rick Meehan said with increased costs, now would be a good time for the resort town to see it get approved.
"Our budget for public safety, to manage the crowds to manage the people that we have coming to Ocean City today, increased by $5.7 million since 2020," said Meehan.
Meehan also said the cost of promoting the town with advertising and marketing campaigns continues to rise, and an increase in room tax could keep them competitive with other resort destinations.
"Today in Virginia Beach their room tax is 8% plus they charge $2.00 a night," said Meehan. "So we're remaining competitive and we'll still be at the low end for room tax in the state of Maryland."
Funds generated from room tax go directly into the general fund, according to Meehan. It can then be used for fire, EMS, communications, public works and beach maintenance.
However, Meehan did say a certain amount is allocated for marketing and advertising, but the majority remains in the general fund.
"Just for an example, last year if we collected $20 million in room tax, over $13 million went into the general fund to offset general expenses and to keep our tax rate," said Meehan.
While most of the money the town receives from the room tax goes into the general fund, Susan Jones, Executive Director of the Hotel Motel Restaurant Association would like money generated from tourism, to be put back into tourism.
"We do feel it's a great investment in tourism, and of course we want to make sure that the money that is generated off the tax base is used for tourism purposes," said Jones.
But, Meehan said when it comes to expenses generated from the general fund, a lot of them have to do with costs brought on by visitors.
"A lot of these costs are generated by the visitor, so we feel the room tax should be used to cover those increased costs," said Meehan.
If this legislation passes, it would go into affect on July 1st of 2023. However, still plenty of debate left in Annapolis, and then in Worcester County, before anything is made official.