The Star Democrat
St. Michaels commissioners oppose tax increase
ST. MICHAELS — During a legislative and working session on Nov. 10, the commissioners of St. Michaels discussed their opposition to a proposed increase in the county’s public accommodations tax.
The current accommodations tax rate in Talbot County is 4%, a rate that hasn’t been raised since 2005. Including state sales tax, guests in any of the county’s hotels, bed and breakfasts or short-term rentals are paying a total of 10% tax. The current rate is also the lowest in the state.
However, a committee of the Talbot County Tourism Board are proposing that the county raise its public accommodations tax rate to 6%, bringing the total tax on a transient room to 12%.
The board’s proposal explains that raising the accommodations tax will create long-term sustainability for the work of Talbot Tourism. The proposal also states that the additional revenue can be reinvested in tourism development to maintain Talbot County’s position as a premier travel destination, and the revenue from visitors will help pay for the services they use.
St. Michaels is the largest provider of tax revenue in Talbot County, according to a document from the Talbot County
Department of Economic Development and Tourism. The tourism board’s proposal indicates that the town is predicted to bring in over $691,000 in accommodations tax revenue for fiscal year 2021 — the highest total revenue that St. Michaels has ever brought in.
The increase can be attributed to the high number of tourists who come to St. Michaels. The town has performed better than expected, especially with the COVID-19 pandemic, Commissioner Aida Khalil said.
Khalil pointed out that the revenue generated by the tax is not necessarily for tourism; it goes toward economic development and advertising for the county. She added that the burden has been put on the town’s hospitality industry to promote advertising for the whole county.
“I don’t believe in increased taxes; not on my tourists, not on my residents and not on other businesses. I’m against it,” she said, referring to the residents of St. Michaels. “There’s other ways to cut back budgets, there’s other ways to make it work. That’s where I stand.”
Commissioner and treasurer Tad DuPont agreed with Khalil, saying he’s never for tax. He stated that it’s “totally unfair” to always rely on money from the hospitality industry in St. Michaels, and improvements could be made to spread the load around.
“It seems to me (that) to raise taxes, to raise more money when you already are doing very well is not a good, solid business decision,” he said.
Commissioner David Breimhurst echoed the other commissioners’ sentiments.
“One thing I don’t see in all of this is rationale for the increase. Why is it needed?” he said. “They may have some aspirational goals listed, but I don’t see any hardship that the county has right now that necessitates a 2% increase in this tax.”
The commissioners came to agree that they saw very little, if any, support for the increase in the accommodations tax and intend to let the county council know at an upcoming meeting.