Hotel Tax Law Amended to Change How Online Sites are Taxed

Online hotel booking sites like Expedia and Travelocity will end up paying more toward the county through a change approved on Monday by the county council.

Anne Arundel County taxes hotels 7 percent of the cost of a room rental. But websites that specialize in hotel bookings usually end up paying less because they get those room rates as a discounted price.

Councilmen voted in favor of a change to the way the county’s hotel tax is written, which clarifies the law. The new definition says that the tax will be taken from the final price of the room, not the discounted rate. That change was approved on Monday by a 4-3 vote, with Councilmen Daryl Jones, Jamie Benoit and Jerry Walker voting nay.

Walker said he saw this as a tax increase by a growing government, and he believed that the added cost would be paid for by customers in the form of increased costs.

“I think it could be argued that this is nothing more than a way to grab additional revenue for the county, and the end-user will end up paying more,” Walker said.

While the hotel tax remains at 7 percent even with Monday’s change to the law, Walker argued that the scope of the tax had increased, and hotel booking sites would ultimately see a 25 percent increase in the amount they are taxed.

Councilman John Grasso said the way the sites have been operating seemed dishonest to him. They pay only a small share of the tax, and pocket the remainder as profit, he said. This would balance the scales.

“To me, this looks like scamming and fraud,” Grasso said.

The county makes about $15 million annually through the hotel tax. Alan Friedman, the director of government relations in Anne Arundel County, said changing the definition will bring the county more revenue, but exactly how much remains to be seen.

Travelocity lists four hotels in Glen Burnie, including , Hampton Inn, Days Inn and Extended Stay America.