OCEAN CITY – If you use an online service for your accommodations in America’s Greatest Family Resort – aka Ocean City – it is likely to cost you more than it used to: The City Council has approved a 3% occupancy tax on short-term rentals booked through online travel services like Airbnb.
The city calculates that the new tax could bring in $1.9 million in revenue.
The ordinance, adopted July 17 on a 4-3 vote, requires the visitor and not the property owner to pay the tax.
Ocean City joins Cape May City and Lower and Middle townships as communities that take advantage of the state statute that allows a 3% municipal occupancy tax.
In Ocean City, the tax will only be levied on short-term rentals booked online and not on those arranged through a real estate professional.
The council was split on the new tax, with David Winslow dismissing the argument that the tax would hurt tourism in the resort city. Those who opposed the tax said other means of booking accommodations escaped the tax altogether. Those visitors booking through a real estate broker, those paying the owner directly, and those staying in a traditional hotel or motel will not pay the tax.
Two council members, Jody Levchuk and Sam Barnes, acknowledged that they own investment properties that they rent out through online travel services. Neither abstained in the vote, with Levchuk voting yes and Barnes, who had said he would abstain, voting no.
Since Barnes had already commented on the ordinance, something he should not have done if he intended to abstain, council attorney Dottie McCrosson advised, “You might as well cast your vote.”
Councilmen Keith Hartzell and Tony Polcini joined Barnes with “no” votes, while Winslow, Terry Crowley Jr. and Pete Madden voted “yes” with Levchuk to form the majority. The ordinance next goes to the state for a review that usually takes 90 days, meaning it will have no impact on this summer season.
Polcini had voted in favor of the ordinance when it was introduced on a 5-2 vote on June 26. His was the only vote to change in the interval.
Winslow pointed to low administrative costs for the new tax. The funds are collected by the online service, sent to the state, and then sent by the state to the municipality.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.