Local Government - Accommodations Intermediaries - Hotel Rental Tax - Collection by Comptroller and Alterations
SB979 revises Maryland’s hotel rental tax framework to shift collection and remittance responsibilities for accommodations booked through accommodations intermediaries—such as online short-term rental platforms—from counties to the Comptroller. The bill expands the definition of taxable accommodations to include short-term rental units and requires intermediaries to collect the hotel rental tax on booking transactions, file returns with the Comptroller, remit taxes to the State, and separately report these amounts from sales and use tax. It also creates a single consolidated return process for intermediaries and authorizes the Comptroller to establish the remittance, distribution, and audit procedures needed to administer the tax.
The bill also preempts conflicting local laws and agreements in several respects, while preserving county and municipal authority over taxes that are not collected through intermediaries. It repeals certain county-specific exemption powers, bars counties and municipalities from imposing higher hotel tax rates on short-term rentals than on other accommodations, and requires advance notice to the Comptroller before local rate changes take effect. In addition, it makes targeted changes for specific jurisdictions, including Howard County’s room-rental tax cap, and adjusts timing, interest, and penalty provisions in certain counties. The act takes effect July 1, 2027.
SB979 amends both the Local Government Article and the Tax-General Article to create a statewide administrative system for hotel rental taxes collected by accommodations intermediaries. It adds new definitions for accommodations intermediaries, short-term rental platforms, booking transactions, and short-term rental units; establishes a new section authorizing the Comptroller to collect and distribute local hotel rental taxes from intermediaries; and makes hotel rental tax returns and related information subject to State tax administration, confidentiality, audit, refund, and appeal procedures. The bill also changes local law in Howard County and Prince George’s County, and updates county and municipal hotel tax provisions to conform to State collection and preemption rules.
The voting record suggests the bill was generally supported, with strong passage on third reading in both chambers and no committee transcript indicating major opposition. The broad structure of the bill—centralizing collection with the Comptroller and standardizing treatment of intermediary-facilitated bookings—appears to have been accepted as an administrative modernization measure. The rejection of a floor amendment indicates there was at least some effort to modify the bill, but the underlying bill itself advanced with substantial support.
The main points of contention appear to involve state preemption versus local control, especially the bill’s limits on county and municipal authority to set exemptions, collection rules, and tax-rate differences for short-term rentals. Another likely issue is the shift of collection and audit authority from counties to the Comptroller for intermediary-facilitated bookings, which changes who administers the tax and how local governments receive revenue. The bill also creates special rules for online platforms and short-term rentals, which may have raised concerns among local governments, accommodations providers, and intermediaries about compliance burdens, revenue timing, and enforcement authority.