State Rep. Deborah Hudson (R) has introduced a sensible bill that would apply the lodging tax that currently applies to hotels and motels to short term term vacation rentals, such as those that are featured on AirBnB, VRBO and HomeAway.
“This is a tax that is not being collected equally,” she said. “Hotels and motels pay the 8-percent lodging tax, but no other short-term vacation rental operators contribute.” Rep. Hudson added that the change is also needed in light of the new sharing economy. Property owners are now able to market short-term rentals through online services as those mentioned above, directly competing with the traditional lodging industry, while evading the tax.
Under its current structure, the Lodging Tax is projected to produce about $25 million in the upcoming FY 2018. If the bill is enacted, the Delaware Controller General’s Office estimates the broader levy would generate an additional $8 million to $11 million per year. Given the deficit, I imagine this bill will be enacted.
The bill is pending action in the House Revenue & Finance Committee.
SPONSORS: Hudson, Simpson, Keeley, Kowalko
HISTORY: Placed in the House Revenue & Finance Committee on 4/13/17
STATUS: Waiting on a vote in committee.