Recently, many online travel companies are being assessed taxes from different state and local governments. Specifically, the online travel companies are being assessed a rental tax in many circumstances. Maryland House of Delegates Bill 209 (“HB 209”) recently amended the Maryland Code allowing Howard County to amend a tax applying to rental hotel rooms.
The HB 209 amendment states that the room rental tax will now apply to a fee charged by an intermediary who facilitates the rental of the room. An intermediary is defined in the rental tax law as “a person other than a hotelkeeper, who facilitates the rental of a room and charges a transient for the rental of the room.” The amendment further explains the term “facilitates” as someone who brokers, coordinates or is in some other manner arranges for the rental of the room. The rental tax will not apply to a commission paid by the hotel to the facilitator. The amendment to the statute will affect online retailers that act as the intermediaries that help to obtain rentals of hotel rooms in Howard County. Both the online retailers and their customers will most likely notice the effects of this statute as it will increase the amount of fees that each pays.
The HB 209 amendment to the statute was originally passed in 2015 and was set to go into effect in July of 2015; however, HB 209 was vetoed by Governor Hogan in January of 2016. But recently the Maryland General Assembly overturned the veto. Therefore, the rental tax law will go into effect.
Longman & Van Grack’s Tax Litigation & Controversy Attorneys regularly represent clients in many different tax audits, tax matters, and IRS disputes. Robb Longman has assisted many clients through countless tax matters against the IRS and other state taxing agencies as well. If you would like to contact Robb or one of the other tax attorneys at Longman & Van Grack, you can reach us at (301) 291-5027.