AGENDA ITEM #8
April 5,2016
Public Hearing
MEMORANDUM
TO:
FROM:
SUBJECT:
County Council
Jeffrey
L
ZYOnl4nior Legislative Analyst
Public Hearing:
Expedited Bill 6-16,
Taxation - Room Rental and Transient Tax - Definitions
Expedited Bi1l6-16, Taxation Room Rental and Transient Tax - Definitions, sponsored
by Lead Sponsor Council President at the request of the County Executive was introduced on
March 15, 2016. A Government Operations and Fiscal Policy Committee worksession is
tentatively scheduled for April 7 at 9:30 a.m.
Bill 6-16 would clarify the definition of broker to include entities that facilitate or arrange
payment of room rental for sleeping accommodations; and clarify that service fees or broker fees
charged by brokers or other entities for sleeping accommodations are within the definition of room
rental for purposes of calculation of the
tax.
The Bill would also make editorial changes to locate defmitions in alphabetical order and
conform the expression of the definition to code standards.
This packet contains:
Expedited Bill 6-16
Legislative Request Report
Memo from County Executive
Fiscal and Economic Impact statement
F:\LAW\BILLS\l606 Room Rental And Transient Tax\PH Memo.Docx
Circle #
1
4
5
6
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Expedited Bill No.
::------=6::--..:.;16~:___:_:____:
Concerning: Taxation - Room Rental and
Transient Tax - Definitions
Revised: March 2,2016 Draft No.
4
Introduced:
March 15, 2016
Expires:
September 15, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: --=-:.No=n:'=e":----::--_ _ __
ChI _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
clarify the definition of broker to include entities that facilitate or arrange payment
of room rental for sleeping accommodations;
clarify that service fees or broker fees charged by brokers or other entities for
(2)
sleeping accommodations are
within
the definition of room rental for purposes of
calculation ofthe tax; and
(3)
generally amend the room rental and transient tax.
By amending
Montgomery County Code
Chapter 52, Taxation
Section 52-16
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by
Existing law unaffected by bill.
amendment.
* * *
The County Council for Montgomery County, Maryland approves the following Act:
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ExPEDITED BILL
No.
6-16
1
Sec.
I.
Section 52-16 is amended as follows:
52-16. Room rental and transient tax
2
3
4
*
following meanings:
*
*
(b) The following words and phrases, when used in this Section, have the
5
6
7
[Transient:
An
individual who, for any period of 30 or fewer consecutive
days, actually occupies a sleeping accommodation.]
8
9
Broker[
:
A] means
~
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).
10
11
12
13
14
Director
means the Director of Finance or the Director's designee.
Hotel or motel
means[:
(1)
Any] 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. [(2)] A hotel or motel does not include:
15
16
17
18
19
20
ill
[(A)] a hospital, medical clinic, nursing home, rest home,
convalescent home, assisted living facility, or home for elderly
individuals; or
21
ill
[(B)] 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.
22
23
24
25
26
Hotelkeeper[:
A)
means
~
person that:
(1) owns or operates a hotel or motel; or
(2) acts as a broker.
F:\lAW\BILLS\1606 Room Rental And Transient Tax\BiII4.Docx
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ExPEDITED BILL
No. 6-16
28
29
30
31
32
33
34
35
36
37
Room rental[:
The] 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
Qy
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 use of sleeping
space~
such as Wi­
Fi access, food, beverage, movie rental, or fitness center access. The
portion ofthe total charge, ifany, that represents
~
charge other than room
rental must be separately billed.
Transient
means an individual who, for any period of 30 or fewer
38
39
40
consecutive days, actually occupies
~
sleeping accommodation.
[Director: Director of Finance or the Director's designee.]
*
*
*
41
42
43
44
Sec. 2. Expedited Effective Date: The Council declares that this legislation is
necessary for the immediate protection ofthe public interest. This Act takes effect on
the date on which it becomes law.
45
46
Approved:
47
Nancy Floreen, President, County Council
48
49
Date
Approved:
Isiah Leggett, County Executive
Date
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LEGISLATIVE REQUEST REPORT
Taxation
Expedited Bill 6-16
Room Rental and Transient Tax
-
Amendments
DESCRIPTION:
PROBLEM:
This Bill would amend County law by clarifying that portion of the room
rental charge that is subject to the County's Room Rental and Transient Tax.
With the expansion in the number of brokers and the use of different terms to
describe non-discretionary charges to the transient it is necessary to further
clarify the calculation of the transient
tax.
To facilitate the efficient and orderly assessment and collection of the Room
Rental and Transient Tax.
GOALS AND
OBJECTIVES:
COORDINATION:
Department of Finance
FISCAL IMPACT:
To be requested.
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
To be requested.
Subject to the general oversight of the County Executive and the County
Council.
Unknown.
Michael
J.
Coveyou, Chief, Division of Treasury, Department of Finance
APPLICATION
None.
WITIDN
MUNICIPALITIES:
PENALTIES:
None.
F:\LAW\BILLS\1606 Room Rental And Transient Tax\Transient Tax Amendment LRR.Ooc
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
February 9,2016
TO:
FROM:
SUBJECT:
Expedited Bill No. - XX-16, Amendments to Montgomery County Code
Chapter 52 - Taxation - Room Rental and Transient Tax
I am recommending an amendment to Chapter 52-16 of the County Code to
clarify the definition of a broker and the portion of the room rental charge that is subject to the
County's Transient Tax. The current Code already requires that the total charge that a transient
must pay is subject to this tax, but given the expansion
in
the number of brokers and the use of
different tenns to describe non-discretionary charges to the transient it is necessary to further
clarify the calculation of the transient tax.
I urge the Council to support this legislation. My staff are available to respond to
any questions you may have on this amendment or provide additional clarification.
Attachments
cc: Timothy L. Firestine. Chief Administrative Officer
Marc
p,
Hansen, County Attorney
Bonnie Kirkland, Assistant Chief Administrative Officer
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Information Office
Jennifer Hughes, Director, Office of Management and Budget
Michael Coveyou, Chief, Division of the Treasury, Department of Finance
Joseph F. Beach, Director, Department of Finance
montgomerycountymd.gov/311,
~
'3
" ,
'"
'/~
240..773-3556 TTY
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Fiseal Impact Statement
Expedited Bill XX-16, Taxation - Room Rental and Transient Tax Amendments
L Legislative Summary.
This expe.9.ited bill would amend County law by clarifying
that
portion of the room rental
charge that is subject
to
the County's Room Rental and Transient Tax.
2.
An
estimate of changes in County revenueS and expenditure.,> regardless of whether the
revenues or expenditures are assumed 'in the recommended or approved budget. Includes
source of
information~
assumptions, and methodologies used. '
This Bill would have no fiscal impact on the County.
3.
Revenue and expenditure estimates covering at
least
the next
6
fiscal years.
This Bill would have no fiscal impact on the County.
4.
An
actuarial analysis through the entire amortization
period
for each bill
that
would affect
retiree pension or group insurance costs,
ThisBi11 would have no fiscal impact on the County.
5.
An
estimate of expenditures related
to
County's information technology (IT) systems,
including Enterprise Resource Planning (ERP) systems.
This is not
applicable
to this Bill.
6. Later actions that may affect future revenue and expenditures
if
the bill authorizes future
spending.
Ihis is not applicable to this BilL
7.
An
estimate of the
staff
time
need~d
to
implement the bill
This is not applicable to
this
Bill.
8.
An explanation of
how
the
addition of new
staff
responsibilities would affect
other
duties.
There are no additional duties.
9. An estimate of costs when an additional appropriation is needed.
No additional appropriation is needed .
..
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10. A description of any variable
that
could affect revenue and cost estimates.
This
is
not applicable
to
this
Bill.
11. Ranges ofrevenue or expenditures that are uncertain or difficult to project.
This
is not applicable
to
this
Bill.
12.
If
a bill
is
likely to
have no
fiscal
impact,
why
that is the case.
This
is not applicable
to
this Bill.
13.
Other fiscal impacts
or
comments.
This
is not applicable
to
this Bill.
14. The following contributed to and concurred
with
tbisanalysiS!
, Michael Coveyou,Department ofFinance
'.
Jane Muldra, Office ofManagement and Budget
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Economic Impact Statement
Expedited Bill ##-16, Taxation-
Room Rental and Transient Tax - Amendments
Background:
This legislation would clarifY the definition of broker and room rental charges to include
entities
that
facilitate or mange payment of room rental for sleeping accommodations,
Expedited Bill ##-16 clarifies service fees or broker fees charged by brokers or other
.entities for sleeping accommodations
that
are
within
the
definition of
room
rental for
purpo~s
ofcalculating
the
tax,
1. The
sources of
information, assumptions, and methodologies
used.
Expedited Bill ##-16 amends Section 52-16 ofthe County Code
by
clarifying
that
portion of the room rental charge
subject
to
the County's Room Rental and Transient
Tax.
Since the legislation proposes clarifYing language in the calculation ofthe
transient
tax,
there are no sources of information, assumptions
and
methQdologies
used
in
the
preparation ofthe economic impact statement.
2.
A description of
any
variable that could affeet the economic
impact
estimates.
There are no
variable~
that
could affect the economic impact estimates:.
3. The BiU's positive or negative effect;
if
any on employment, spending, savings,
investmeDt, incomes,
and
property values in the County.
Expedited Bill ##-16 has no economic impact on the Countfs
employmen~
spending, savings, investments, incomes, and property values because it is merely a
clarification ofexisting
law.
4. If a Bill is likely to have no economic impact, why is tbat the case?
Please see
paragraph #3
5.
The foUowing contributed
to
or coneurred witb this
analysis:
David Platt, Michael
Coveyou,. and Robert Hagedoorn, Department of Finance.
~f.~
,
~
Director
.
DePartment ofFinance
Da'k
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