Sussex County looks to impose lodging tax
Sussex County officials have moved a step closer to enacting a lodging tax on hotels, motels and tourist homes in unincorporated areas of the county.
At its Oct. 22 meeting, Sussex County Councilman Irwin “I.G.” Burton of Lewes introduced the ordinance, which is required to levy the tax. A county council public hearing will be scheduled in November.
House Bill 228 gives Sussex and Kent counties authority to impose the tax; New Castle County was given authority in 2018. Most incorporated towns and cities in the county already have lodging taxes.
Under a proposal presented by Sussex County Administrator Todd Lawson, the county would enact up to a 3 percent tax on all hotel and motel rooms and tourist homes with five or more bedrooms, such as bed and breakfast inns. Lawson said short-term rentals such as Airbnb rentals would be excluded from the tax.
According to Lawson, more than 40 venues could be taxed, raising an estimated $1.3 million per year.
Lawson said funds would be placed in a special account with county council determining how the money would be spent during the annual budget process. Under state law, funds can be used for beach replenishment, dredging, economic development, tourism programs, recreational activities, water-quality projects and flood-control projects.
Five percent of funding can be used for administrative costs.
Under the proposed plan, hotels, motels and tourist homes would submit payments monthly to the county. Lawson said in the near future, it's possible the state could collect the tax electronically, removing the county from the collection process. “We will know more about the state's software upgrades in 2020,” he said.
If approved, Lawson said the tax could be imposed starting in January 2020.
If the maximum 3 percent tax is approved, the tax on a $100-a-night room would be $3. At full occupancy in a 100-room hotel, the tax would be $300 per night. Occupancy rates average from 80 to 85 percent in the 80 hotels and bed and breakfast inns throughout the county, including those in towns and cities. There are more than 4,200 rooms in the county with another 800 rooms scheduled to be built.
