Sussex County Council voted unanimously Tuesday to approve a tax on stays in hotels and motels. The 3% lodging tax is expected to generate an estimated $1.3 million annually for the county.
There are 40 qualifying venues countywide. It does not affect short term rentals like Airbnbs.
Julie Cummings owns a motel on Fenwick Island. She says she is not opposed to the tax, but thinks it should also include Airbnbs.
“The state, in my opinion, is biting the hand that feeds it,” said Cummings. “We’re the ones collecting the money, but yet they turn around and are giving the condos, the campgrounds and the Airbnbs an unfair advantage against the hotels and motels.”
Delaware’s General Assembly approved Sussex County’s authority to collect a lodging tax earlier this year. Sussex hotel and motel owners already pay an 8% tax to the state.
The new county ordinance dictates the funds generated from the new tax must be used for a broadly defined list of projects including beach nourishment, economic development and water quality project with a recommended focus on waterway dredging.
“We’re asking our visitors to help share the cost of maintaining the infrastructure, the dredging, the things that make the area attractive and want to come here,” said Councilman John Riley. “The point about short-term rentals, Airbnb is well taken.”
Riley adds he believes the tax disparity between Airbnbs and hotels and motels is in the pipeline of discussions.
Collection on the new tax is set to begin at the start of the new year.