The Complete Maryland STR Lodging Tax Guide: Airbnb and VRBO Maryland Occupancy Tax Breakdown

As a short-term rental host in Maryland, understanding the complex world of lodging and occupancy taxes is crucial for your business success. Whether you're listing a cozy Baltimore apartment or a beachfront property in Ocean City, knowing your tax obligations will help you avoid penalties and operate your rental legally.

Maryland-Wide Lodging Tax Requirements for Airbnb Hosts

All short-term rental hosts in Maryland must collect and remit the state sales and use tax of 6% on their rental income. This tax applies to the entire rental charge, including cleaning fees, pet fees, extra person fees, and similar charges. The tax is collected for reservations of 30 days or fewer, though some jurisdictions may have different timeframes.

During the earlier days of Airbnb, there was an exemption that applied to short-term rentals. However, it was removed and made effective way back on June 1, 2018, making all Airbnb and similar platform rentals subject to this tax.

Example: A $150/night rental for 2 nights with a $75 cleaning fee.

• Nightly rate: $150 x 2 nights = $300
• Total with cleaning fee: $300 + $75 = $375
• Maryland state sales tax (6%): $22.50
• Total charged to guest: $397.50

County-Wide Occupancy Tax Requirements

Baltimore County

Hosts operating in Baltimore County face additional tax requirements beyond the state sales tax. They are subject to a Transient Occupancy Tax of 9.5% of the listing price, including any cleaning fees for reservations 88 nights and shorter.

Baltimore takes a relatively strict approach to enforcing its short-term rental regulations but still allows both hosted and un-hosted rentals provided they meet licensing requirements.

Example: a 3-night stay at a $180/night rental with a $100 cleaning fee

1. Nightly rate: $180 x 3 nights = $540
2. Cleaning fee: $100
3. Total rental income: $640
4. Maryland state sales tax (6%): $38.40
5. Baltimore transient occupancy tax (9.5%): $60.80
6. Total Taxes: $38.40 + $60.80 = $99.20
7. Total charged to guest: $739.20

Montgomery County

Short-term rental hosts in Montgomery County must collect and remit an additional Room-Rental Transient Tax. It's an extra 7% tax on the total room rental, applicable to all stays of 30 days or less.

Example: A 4-night stay at $200 per night with a $120 cleaning fee.

1. Nightly rate: $200 x 4 nights = $800
2. Cleaning fee: $120
3. Total rental income: $920
4. Maryland state sales tax (6%): $55.20
5. Montgomery County transient tax (7%): $64.40
6. Total Taxes: $55.20 + $64.40 = $119.60
7. Total charged to guest: $1,039.60

Anne Arundel County

Hosts with properties in Anne Arundel County must collect a Hotel Occupancy Tax. This tax is applied to all stays of 120 nights or shorter and is 7% of the listing price including all extra charges and fees.

Example: A 2-night stay at $120 per night with a $60 cleaning fee.

1. Nightly rate: $120 x 2 nights = $240
2. Cleaning fee: $60
3. Total rental income: $300
4. Maryland state sales tax (6%): $18
5. Montgomery County transient tax (7%): $21
6. Total Taxes: $18 + $21 = $39
7. Total charged to guest: $339

Worcester County

Worcester County has its own tax requirements for short-term rentals. They impose a Room Tax of 5%, applicable to the total listing price, including all extra fees to bookings 120 days or shorter. Hosts with properties in this popular beach destination must collect applicable taxes as outlined by the county.

Example: A 7-night stay at $250 per night with a $150 cleaning fee.

1. Nightly rate: $250 x 7 nights = $1750
2. Cleaning fee: $150
3. Total rental income: $1900
4. Maryland state sales tax (6%): $114
5. Montgomery County transient tax (7%): $95
6. Total Taxes: $114 + $95 = $209
7. Total charged to guest: $2109

Wrapping Things Up

By understanding and fulfilling your tax obligations, you'll be well-positioned to run a successful and legally compliant Airbnb business in Maryland. Always consult with a tax professional familiar with short-term rental regulations in your specific area to ensure complete compliance.

To learn more about the taxes and regulations applicable to Maryland hosts, check out the official Maryland Government website.