ST. MARY’S ACCOMMODATION TAX COLLECTIONS FOR 2023 SOAR WITH ENFORCEMENT OF SHORT-TERM RENTAL PAYMENTS

ST. MARY’S NOW COLLECTING HUNDREDS OF THOUSANDS MORE BY ENFORCING ACCOMMODATIONS TAX PAYMENTS BY SHORT-TERM RENTALS

In 2021, St. Mary’s County reported only collecting from three short-term rentals for the county’s accommodations tax, which is levied for any properties, including hotels and motels. A total of $660,993.32 was collected.  $1,019,278 is the total collected during 2023.

During 2021, the worldwide Wuhan Pandemic took place with demand for short-term rentals soaring in order to flee cities; the failure of St. Mary’s County to collect the funds added to the burden of property owners who didn’t get any relief from their responsibility to fund the operations of St. Mary’s County.

A software system called RentalScape to identify rental properties not in compliance with the payment of rental taxes. The software cross-references and mines information from roughly 80 different online platforms, including VRBO and Airbnb that tracks the location and properties advertised for short-term rent through a variety of hosting platforms and is available for St. Mary’s County to seek and collect payments of accommodation taxes. Many counties in the nation are using this software, such as Monroe County in Florida; RentalScape posted this information on its website, pinpointing the problem that many municipalities and counties are experiencing with an exploding number of short-term rentals.

Over the last decade, the short-term rental (STR) market has overwhelmed and outpaced local resources responsible for properly regulating its growth.

Changes in local real estate and local ordinances designed to ensure safety and compliance have not caught up with rapid market and technological changes, which continue to grow unchecked. 

Unregistered properties, unwelcome changes in the neighborhood’s character,  declining home values, and continued squeezing of affordable housing are just a few of the important side effects cities face with the rise of short-term rentals.

After requesting this Accommodation Tax information from the St. Mary’s County Board of Commissioners for the most recent calendar year of 2023, the situation has changed dramatically, with Airbnb Avalara, Home Away.com Inc. (VRBO) both showing dramatic increases in taxes paid by customers in Airbnb and VRBO rentals that have dozens of rental properties in St. Mary’s County, Md.
The Holiday Inn, Home 2 Suites, and the Airbnb Avalara (the reporting system for Airbnb) are the largest payers of this rental tax.

ASK THE COMMISSIONER: ERIC COLVIN

Thanks, Ken, good story! I had not seen the numbers yet for 2023, so I’m happy to see that short term rentals are starting to pay their fair share. If people were to visit the county and stay at a hotel, they would pay that tax, so it was a mistake that the county waited so long to collect it from short-term rental properties. Those visitors are driving on our roads and utilizing our services, too, and tax revenue is critical in budget-tight times to help keep the burden off of our citizens. Additional challenges remain with regulating short-term rentals. Most of them are a great source of revenue for their owners and benefit to the community, but there are a few outliers that degrade the neighborhood they are located in. We need to find the correct balance of benefiting the local economy while still ensuring that we protect all property owners and their right to live.

St. Mary’s County Attorney provided this note
with the requested information.

This office has received your Request for Public Information on January 22, 2024, in which
you request certain records under the Maryland Public Information Act, Annotated Code of
Maryland, General Provisions Article (“GP”), § 4-101 et seq. Specifically, you have requested to
inspect and copy records in the custody and control of the St. Mary’s County Government
pertaining as follows:

• All 2023 calendar year rental revenue received by St. Mary’s County.
  Pursuant to your request, the following information is provided in response:

1. An electronic copy of CY2023 accommodation taxes received by
   Commissioners of St. Mary’s County.