(a) (1) The Director of Finance must impose on each transient a tax at the rate of 7 percent of the total amount paid for room rental, by or for the transient, for sleeping accommodations in any hotel or motel that is located in the County.
(2) The County Council by resolution, after a public hearing advertised under Section 52-17(c), may increase or decrease the rate of this tax.
(b) The following words and phrases, when used in this Section, have the following meanings:
Broker means a person, other than the owner or operator of a hotel or motel, that receives, facilitates or arranges payment, directly, indirectly, or through an online platform, for hotel or motel accommodations from a transient who is subject to the tax under subsection (a).
Director means the Director of Finance or the Director’s designee.
Hotel or motel means any hotel, inn, hostelry, tourist home or house, motel, apartment hotel, rooming house, dwelling unit or other lodging place that offers for compensation sleeping accommodations in the County. A hotel or motel does not include:
(1) a hospital, medical clinic, nursing home, rest home, convalescent home, assisted living facility, or home for elderly individuals; or
(2) a facility owned or leased by an organization that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code if the primary use of the facility is other than housing overnight guests.
Hotelkeeper means a person that:
(1) owns or operates a hotel or motel; or
(2) acts as a broker.
Room rental means the total charge required to be paid by a transient for a sleeping accommodation. Room rental includes any service fee, broker’s fee, or other charge or fee required to be paid by the transient regardless of what the charge is called or how the charge is designated. Room rental does not include any optional charge for services in addition to the charge for the use of sleeping space, such as Wi-Fi access, food, beverage, movie rental, or fitness center access. The portion of the total charge, if any, that represents a charge other than room rental must be separately billed.
Transient means an individual who, for any period of 30 or fewer consecutive days, actually occupies a sleeping accommodation.
(c) Every hotelkeeper that receives any payment for a room rental that is subject to a tax under this Section must collect the amount of tax imposed under subsection (a) when payment for the room rental is made. The hotelkeeper must hold the taxes required to be collected by this Section in trust for the County until remitted as required by this Section.
(d) (1) Each hotelkeeper must file a report on a form supplied by the Director. The form must show the amount of room rental payments collected, the amount of tax required by this Section to be collected, and any other information the Director requires to assure that the proper tax has been remitted to the County.
(2) Unless the Director accepts a quarterly report, each hotelkeeper must file a report on or before the last day of each month showing all room rentals during the preceding month.
(3) If a hotelkeeper requests, the Director may, in the Director’s sole discretion, accept a quarterly report showing all room rentals during the 3 months immediately before the month when the report is due. Each hotelkeeper so approved must file a quarterly report on or before the last day of April, July, October, and January.
(4) Each hotelkeeper must remit the full amount of tax due with each report
(e) If any hotelkeeper does not remit to the Director the tax required to be paid by this Section, or does not file a timely report to the Director, the Director must add to the tax due:
(1) interest at the rate of one percent per month on the amount of the tax for each month or part of a month after the tax is due until the tax is paid and the report is files; and
(2) a penalty of 5 percent of the amount of the tax per month or part of a month, not to exceed a total of 25 percent of the tax, until the tax is paid and the report filed.
(f) (1) If a hotelkeeper does not file a required report by the deadline established under subsection (d), the Director may estimate the amount of tax due. The Director may base the estimate on a reasonable projection of room rentals, and may consider rentals reported by other hotelkeepers.
(2) The Director must send a notice of the estimated tax due, including interest and penalty, to the hotelkeeper’s last known address. The hotelkeeper must pay the estimated tax, including any interest and penalty, assessed by the Director within 10 days after the notice is sent.
(g) (1) Each hotelkeeper must preserve, for 3 years, all records necessary to determine the amount of the tax due under this Section.
(2) The Director may inspect any records required to be kept under this Section at any reasonable time.
(h) If a hotel or motel stops doing business or a hotelkeeper disposes of its business, the hotelkeeper must immediately file a report under subsection (d) and pay any tax due.
(i) Each hotelkeeper or transient that does not comply with any provision of this Section has committed a class A violation. A finding of violation under this subsection does not relieve any hotelkeeper or transient of any tax, including any applicable interest or penalty, due under this Section.
(j) At least 7% of the revenue from the tax levied under this Section must be used for the Conference and Visitors Bureau, Inc., as designated by the Council in a budget resolution to promote travel to the County. The County Executive must report to the Council on the use of these funds by March 15 each year. (1975 L.M.C., ch. 38, § 1; 1983 L.M.C., ch. 22, § 56; 1984 L.M.C., ch. 38, § 1; 1987 L.M.C., § 24, § 1; CY 1991 L.M.C., ch. 11, §§ 1 and 4; CY 1991 L.M.C., ch. 25, § 1; 1994 L.M.C., ch. 7, § 1; Council Resolution No. 13-524; 2009 L.M.C., ch. 14, § 1; 2013 L.M.C., ch. 6, § 1; 2015 L.M.C., ch. 25, § 1; 2016 L.M.C., ch. 14, § 1.)
Editor's note— The U.S. Court of Appeals upheld the constitutionality of this statute in United States v. Montgomery County, 761 F.2d 998 (4th Cir. 1985).
See County Attorney Opinion dated 6/17/04-B describing the procedures for approving a tax rate change for admissions and amusements.
1984 L.M.C., ch. 38, § 3 provides as follows: Sec. 3. This Act shall apply to:
(a) All taxes paid within three years prior to the effective date of this Act.
(b) All taxes due and/or assessable for periods within four years prior to the effective date of this Act.
(c) All taxes due, payable, billed or assessed where legal action has been instituted and is pending on the effective date of this Act.