Montgomery County hopes to bring in an extra $228,000 next fiscal year by expanding its hotel tax to include room rental services such as Airbnb.
County Executive Isiah Leggett requested a bill that would add “dwelling unit” to the definition of hotel or motel and remove the requirement that a hotel or motel accommodate five or more guests.
In a memo introducing the legislation, Leggett said he already put $228,000 into his FY 2016 operating budget, the revenue estimated to come as a result of the bill. Council President George Leventhal is set to introduce the bill on Tuesday.
The tax would apply to other services such as HomeAway and Loft. Airbnb, though, is the most popular room rental service. About 10 million people rented rooms using the San Francisco-based company’s website in 2014. The internet-based incarnation of a bed and breakfast surpassed 800,000 listings worldwide, meaning Airbnb now offers more lodging than any hotel chain in the world.
Its popularity has also led to a number of cities changing hotel tax laws to recoup revenues. Airbnb approached Washington, D.C. about the issue and the city and tech company worked out a tax deal earlier this year.
Though Montgomery County seems likely to follow the pattern, renting out a room via Airbnb is still technically illegal in the county.
Under the new zoning code that went into effect last fall, tenancy of less than a month is prohibited in all residential zones, making it illegal to rent out a room or a home for one night or one weekend — the type of deals that make up the vast majority of transactions happening on Airbnb.
A quick search for Bethesda on the website on Monday showed more than 50 results.
A zoning change proposed by Councilmember Hans Riemer would allow such uses.
The tax bill, if approved, would go into effect immediately.