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Proposed New Castle County hotel tax increase draws some opposition

Courtyard by Marriott University of Delaware

In his budget address this week, New Castle County Executive Matt Meyer requested state legislation allowing the county to add a new tax on hotel stays, but some hotel owners think it’s unfair.

A draft proposal sponsored by State Rep. Bryon Short (D-Highland Woods) and State Senator Margaret Rose Henry  (D-Wilmington) would let New Castle County to impose a 3% lodging tax increase. Hotels in Delaware already pay an 8% lodging tax to the state.

Bill Sullivan sits on the board of the Delaware Hotel Lodging Association. He says the board plans to appeal to the legislators because an 11% tax would make New Castle County hotels less competitive.

“Well the first thing that happens is when you got make a proposal for a meeting group they’re going to say, ‘well what’s the lodging tax?’ and we’ll say, ‘well it’s 11%,’ and they’re going to say, ‘well that’s crazy.’ So it’s a competitiveness issue,” said Sullivan.

The state nearly cut its funding for tourism marketing in this year’s budget. Sullivan says he is concerned the new tax proposal makes no mention of allocating funds for tourism. He also says it’s unfair to tax hotels while AirBnb goes untaxed.

“AirBnb is now competing directly with hotels, but they don’t have to comply with any of the safety and fire protection, insurance, zoning and ultimately paying lodging tax,” he said.

Meyer said in a statement, this tax would ensure the cost of county government is shared by all who benefit from its services.

The proposal does not include incorporated areas of New Castle County such as Newark and Wilmington. Wilmington already has a 2% tax.

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