In a first-ever virtual town meeting in Chestertown, the Mayor and Council unanimously passed an ordinance to charge a hotel tax on transient short term rental properties that unfairly compete with hotels and B&B’s, which are subject to the county’s hotel tax.
The tax would apply to non-owner occupied properties in Chestertown that rent to transients through companies like Airbnb, Homestay and VRBO, which do not currently pay the county’s hotel tax.
Mayor Chris Cerino said the new tax levels the playing field.
Cerino said owners of “legit” hotels and B&Bs feel undercut by transient rentals because the tax burden is not applied equally.
The town will be responsible to register the properties and the county will collect the tax. The county takes a 5 percent admin fee and sends the rest of the tax collected back to the town.
The town will also charge a registration fee set by a resolution of the Town Council.
The ordinance identifies the properties as any unit that provides sleeping quarters for a period not exceeding four months.
Cerino said registering the transient rental units would also give the town more control over nuisance properties and allow the town to ensure the units meet compliance with local rental laws.
Some of the transient rentals are incompatible with local zoning laws, according to the ordinance.
The ordinance takes effect April 28 and owners of transient rental properties are required to register with the town and file quarterly rental reports with the Kent County Commissioners.
Violations of any part of the ordinance are penalized at $100/day.