About Short-Term Rentals and the Room Rental–Transient Tax
Homeowners: If you rent your home, or part of your home, for periods of 30 days or fewer, you are required to pay the County’s Room Rental Transient Tax (also known as the Hotel Tax). The Room Rental Transient Tax requirement pertains to each instance that you rent your home, or part of your home, for 30 days or less. For rentals that are longer than 30 days there is no Room Rental Transient Tax due—these rentals must be to the same person or people for more than 30 consecutive days.
You are also required to have
a license for Short Term Rentals from the County Department of Health and Human Services if you rent your home, or part of your home, for less than 30 days.
If you are renting your property for more than 30 days at a time, you probably need a Rental Housing License from the County Department of Housing and Community Affairs.
About the Room Rental-Transient Tax (Hotel Tax):
If you are renting your property for more than 30 days at a time, you probably need a Rental Housing License from the County Department of Housing and Community Affairs.
Section 52-16 of the Montgomery County Code, as amended, imposes a Room Rental-Transient Tax upon each and every person, who for a period of thirty or fewer days occupies, for compensation, sleeping accommodations in a public or private hotel, motel, inn, hostelry, tourist home, a residential house or a room within a house, and or any other lodging located in Montgomery County, Maryland.
Who is Liable for the Room Rental-Transient Tax:
Every provider, including homeowners, that offers for compensation sleeping accommodations for a period of thirty or fewer days is liable for paying the Room Rental-Transient Tax.
As a provider that receives payments for a short-term rental you are liable to pay the tax—if you use an online broker such as, HomeAway, VRBO (Vacation Rental By Owner), FlipKey, Hometogo, Homelidays, VacationRentals, Airbnb, Craigslist, etc., you are still responsible for paying the tax. However, if your online broker pays the tax on your behalf you may provide the County proof that the online broker is submitting the tax directly to the County on your behalf.
What is the Tax Rate:
The Room Rental-Transient Tax rate is 7% of the total room rental collected. If you are booking through an online broker that collects the payment for you, the amount of the room rental collected includes the fees charged to the transient (your customer--the person using the accommodations) by the online brokers who are collecting the payment made for the accommodations.
How to apply for Room Rental-Transient Tax Account:
The Room Rental-Transient Tax Application is available on the County’s website. You can review the Room Rental-Transient Tax Application Instructions Manual on how to use it.
Tax Payment and Tax Due Date:
A Room Rental-Transient Tax Return must be filed online on or before the last day of the month for the preceding month or period. A return must be filed even if no tax is due for that speicific month or period.