St. Michaels approves accommodation tax increase

ST MICHAELS — The accommodation tax has long been a topic of controversy in the town of St Michaels, and some residents expressed concerns about a proposed 2% increase in the tax during a Sep. 25 commissioners meeting.

The tax increase endorsement was approved by a majority of the town’s commissioners at the meeting following months of discussions.

Since August, Talbot County has made moves for a 2% increase in accommodation tax countywide. The county has the lowest hotel tax rate in the state at 4%, which has been in place since 2005.

According to council Vice President Pete Lesher, in order to enact the tax increase, the county would need to ask state delegates this month to bring the proposed change to the General Assembly next year.

Prior to legislative submittal, Oxford, Easton and St. Michaels would need to approve an endorsement for the increase. St. Michaels’ approval was the last the county needed to move forward.

The county attempted to raise the accommodations tax in 2021, but St. Michaels’ commission at the time was not on board.

In town, discussion of a potential increase of accommodation tax has been in the works since the commissioners’ race in May, when the three newly elected commissioners, David Wojciechowski, Alexis Roiter and Jay Hudson, all showed support for the increase.

According to St. Michaels Commissioner Alfred Mercier, the tax would increase the cost of rooms by around $2 to $8.

Mercier said because the increase in tax is minimal, it “really doesn’t have any impact” in terms of the number of people who stay over in a destination site.

Additionally, Mercier said the increase in tax would have a larger impact if the incremental rate, the total change in tax, is “fairly significant,” meaning if the increase was above 10%.

“I just wanted to get rid of the misconceptions on this because this is not a tax on the hotel,” Mercier said. “This is truly a way to tax, if you will, visitors that come into town, and there has been other discussions on how we can generate money, and I know they’re out there.”

Commissioner Alexis Roiter said she agreed with the points made by Mercier and made clear her support for the raise in tax, especially since it will be paid by tourists.

“2% is very small,” Roiter said. “And this isn’t passed down to the actual people coming to town who use our garbage cans, park their cars illegally, throw their trash out and increase the cost of our own services like water. The fact that we are the lowest in the state doesn’t make any sense.”

Commissioner Katrina Whittington reminded commissioners that if they voted against the endorsement, it would be taking away the opportunity for Easton and Oxford to get the additional money, since all three towns would have to agree to raise the accommodation tax.

Although there seemed to be unanimous support among commissioners, business owners and residents in town were concerned of the potential harm the increase would have on businesses.

George Wilson, owner of the Old Brick Inn, shared that occupancy is down for lodging in town, and an increase could have negative effects for businesses like his. Wilson said the tax increase should be met with more scrutiny due to lingering unanswered questions.

“Where is the accommodation tax going? Because I don’t think we have done our due diligence,” Wilson said. “We know what we need, I understand that, but what are we doing with what we have?”

Wilson said the town was ignoring other potential revenue sources, like entertainment taxes on restaurants and stores.

During the public hearing Sep. 25, former St. Michaels Commissioner Tad DuPont brought up concerns involving the loss of smaller inns in the area within the last two years. Along with those concerns, DuPont mentioned the negative affect that undocumented Airbnbs are having on inns.

Whittington said undocumented Airbnb rentals have been a longstanding issue among the town and encouraged residents to report addresses they may suspect of hosting Airbnbs so the town could investigate.

After the public comment, Mercier requested the commissioners move the vote for a later meeting to obtain more information.

Wojciechowski said delaying the vote would interfere with the county’s deadline to bring the issue to state legislators.

A motion was passed for the endorsement of the tax increase with a 4-1 vote. Mercier, who previously supported the increase, voted against the motion, stating there were “a lot of unanswered items.”