MarylandSB 09792025 Regular SessionSenateWALLET

Local Government - Accommodations Intermediaries - Hotel Rental Tax - Collection by Comptroller and Alterations

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Bill Overview

Analyzed Economic Effects

15 provisions identified: 3 benefits, 6 costs, 6 mixed.

Guests get tax back on refunds

When a booking is canceled, the platform or other responsible party must refund the matching hotel tax. The same rule applies when the taxable price is partly or fully repaid or credited. Buyers get back the tax tied to the canceled or refunded share.

Short-term guests avoid higher tax rates

Counties and municipalities cannot charge higher hotel tax rates on short-term rentals than on other accommodations. Municipalities can tax lodging only when state law authorizes it. Counties can lower their hotel tax rate inside a municipality to account for that municipality’s hotel tax. A county reduction is allowed, not required.

Timely platforms keep a tax discount

Eligible booking platforms can keep 1.5% of gross hotel tax collected when they file and pay on time. In Calvert, Carroll, Charles, St. Mary’s, and Washington counties, county commissioners decide eligibility. This covers collection costs; it does not lower the tax charged to guests.

Howard guests face higher possible tax

Beginning July 1, 2027, Howard County can raise its room tax above the former 7% limit, but not above 8%. The law raises the ceiling; it does not set the County’s actual rate. The County also loses its stated authority to exempt hotel classes through its procedural or enforcement rules.

More lodging charges face hotel tax

Maryland’s hotel tax framework covers stays across the state, including short-term rentals. For platform-booked stays lasting no more than four consecutive months, the taxable price includes the buyer’s full payment. It excludes taxes sent to taxing authorities and commissions paid by the lodging provider. The law removes specified county exemptions, including some small-hotel and government-paid lodging exemptions, and ends municipal authority to add exemptions. Qualifying private lodging serving only an organization’s employees, contractors, vendors, or invitees remains exempt.

Booking platforms must collect hotel tax

Platforms are covered after at least $100,000 in Maryland bookings or sales, or 200 transactions, in the prior or current calendar year. Covered platforms must identify the taxable price, collect hotel tax, hold it in trust, and send it to the Comptroller. Platforms alone are liable for collecting tax on bookings they handle for providers; providers send tax on direct bookings to counties. Either party can agree to handle collection and payment through the Comptroller if either is a Maryland tax vendor. That party alone bears liability, and state tax law expressly treats booking platforms as vendors and their bookings as sales.

Late lodging taxes cost collectors more

Garrett County’s unpaid hotel tax carries 1% interest for each month or part of a month after payment is due. That places Garrett in the 1% group, rather than the 0.5% rate applying outside that group. Talbot County imposes a 10% penalty when a required collector fails to pay within one month after the due date. Talbot’s former 120-day period ends; Wicomico County keeps its 120-day period.

Lodging businesses face stronger tax enforcement

The Comptroller can sue or seize property to collect unpaid hotel tax from booking intermediaries. Counties can require hotels and lodging providers to post security for tax payments. Cecil, Talbot, and Wicomico counties can require security only after a provider has defaulted. Beginning July 1, 2027, special limits on Comptroller investigations of intermediaries end. The Comptroller can also directly investigate providers about platform-handled bookings.

State limits local hotel tax changes

County and municipal hotel tax rate changes must start July 1 of the year the locality chooses. Localities must notify the Comptroller in writing by the preceding January 1. Beginning January 1, 2028, state tax rules override conflicting local hotel tax rules and county agreements with booking intermediaries. These rules limit local discretion without setting a new tax rate.

Annapolis hotel revenue supports local funds

The Comptroller collects Anne Arundel hotel tax from booking platforms and distributes it before the following month’s last day. Annapolis hotel revenue goes 3% each to the public art commission, county arts council, and Affordable Housing Trust Fund. Another 17% goes to the Conference and Visitors Bureau, with the remainder going to the City under the statute. The Comptroller can use up to 1.5% of monthly platform collections for administrative costs, leaving less to distribute.

Hotel taxpayers gain review, privacy changes

Beginning July 1, 2027, people and government units have 30 days after an assessment notice is mailed to request revision. They can claim a refund during that window only after paying the assessment; the Comptroller can correct errors later. Hotel tax returns also gain state tax-return confidentiality protection. A separate confidentiality rule for information supplied by intermediaries during specified investigations ends. That repeal does not make the information public or settle whether other laws protect it.

Howard tourism receives higher-rate tax revenue

Beginning July 1, 2027, the Comptroller collects Howard County room tax from platforms on full room charges, including platform fees. The Comptroller sends each month’s collections to the County by the end of the next month. Revenue from rates above 7% goes to the Tourism Council, subject to the County’s annual budget and appropriation process. Revenue from rates above 5% through 7% is split two-thirds to tourism and one-third to the Economic Development Authority. The Comptroller can reserve up to 1.5% of monthly platform collections for administrative costs.

Local hotel revenue gets state handling

The Comptroller handles platform-collected county and municipal hotel taxes through one combined return. County payments are due before the following month ends; municipal payments are due before that month’s last day. Counties must pass along covered funds within 15 days after receiving them from the Comptroller. The Comptroller can reserve up to 1.5% of monthly platform collections for collection and distribution costs. That allowance reduces revenue available for local distribution.

Monthly platform filings, fewer host returns

Covered platforms must file a sworn hotel tax return and pay collected tax by the 25th of the following month. Returns report gross proceeds, taxable price, tax due, and allowed discounts, deductions, or exemptions. Platforms must also file for periods set by regulation, including periods with no transactions; combined returns require Comptroller approval. The Comptroller must provide a single return and collect information needed to credit the correct locality. Providers using only intermediaries get a return waiver if they request it and confirm their exclusive use each year.

Prince George’s towns share hotel revenue

Beginning July 1, 2027, the Comptroller collects Prince George’s County hotel tax from booking platforms. The County’s authorized hotel tax cannot exceed 10%. Each municipality receives 50% of revenue collected within its borders, and the County receives the remaining revenue. Payments are due before the following month’s last day. The Comptroller can reserve up to 1.5% of monthly platform collections for administrative costs, reducing available distributions.

Sponsors & Cosponsors

Sponsor

Guy Guzzone
Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 202 • No: 121

House vote • 4/7/2025

Floor Amendment {813124/1 (Delegate Hutchinson) Rejected

Yes: 37 • No: 100 • Other: 4