Rehoboth joins the room tax increase parade in Delaware

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Rehoboth Mayor and Commissioners voted to impose a lodging tax of a maximum of 3 percent of the rent on hotel, motel and tourist home rentals in the city
The lodging tax provides a more equitable means to recover the cost of services from tourism and not pass along these costs to residents, a release from the city claimed.
Opponents note that proceeds will go directly to the city without any specific designations related to tourism.
The Delaware General Assembly passed Senate Bill No. 86 which authorized municipalities in Kent and Sussex to impose up to a 3 percent tax on public accommodations. Gov. John Carney signed the bill, which places no restrictions on how the funds will be used.
The tax is effective January 1, 2020, and is applied to any reservation made in which lodging occurs on or after January 1.
The city anticipates $113,000 in annual revenue, a tiny part of the $16 million budget.
The tax is in addition to the state’s 8 percent lodging tax that earmarks a portion of the tax for tourism bureaus, beach replinishment and the general fund.
Critics claim an 11 percent total tax will decrease the competitiveness of Rehoboth Beach in attracting visitors. Families have options that include accomodations in other states and even overseas. Not affected are Airbnb or related rentals that typically fly under the radar.
For information about Public Accommodations Tax, visit revenuefiles.delaware.gov/docs/hotmot.pdf.
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