Lawmakers are considering raising taxes on Rehoboth Beach hotels. And of course when taxes go up, room rates go up to compensate. Here are some bits from a recent article on the subject:
Hotel and motel owners could soon face another expense as officials look to boost revenue through the increase and extension of the city’s rental tax.
The measure would raise the current 3 percent gross receipts tax, which is levied on rental income generated by residential properties and cottages, and extend it to hotels, motels and other commercial rentals.
“It would be like pouring vinegar into a sore,” said Inez Conover, who owns the Sea Witch Manor, BEDazzled and Bewitched inns. “We’re taxed enough already.”
Hotel and motel owners are not currently taxed by the city, but 8 percent of their annual rental income is paid to the state. Changes at the city level would mean owners could be forced to relinquish 11 percent or more of their annual income.
If that’s the case, Conover said spending a night in Rehoboth Beach will be more costly.
“I’ve had to reduce my rates significantly (because of the economy),” she said. “But if taxes are going up, then prices will have to as well.”
