Rehoboth proceeds with its 3% lodging tax

REHOBOTH BEACH — Travelers, tourists and others seeking lodging may soon pay more to stay in the City of Rehoboth Beach with New Year 2020’s arrival.

Authorized by the state of Delaware in July of this year, Rehoboth commissioners on Monday voted to proceed with implementing an additional 3 percent lodging tax on motels, hotels and tourist homes, effective Jan. 1, 2020.

Rehoboth was one of six municipalities granted authority by the General Assembly this year to impose a lodging tax of up to 3 percent on top of the state’s existing 8 percent public accommodations tax.

The town of Georgetown approved its 3 percent tax hike, which will become effective in November on hotels and motels within the town limits. Based on revenue generated by the state accommodation tax hike, it could mean upward of $100,000 or more annually for the town.

Rehoboth Beach Mayor Paul Kuhns said, “There was a consensus to move it forward and take it up for a formalized vote at our next meeting, which is Aug. 16.”
For the city of Rehoboth, one of Delaware’s popular tourist havens, it could mean hundreds of thousands of dollars in additional annual revenue.

“I did some further research, digging down, and it’s somewhere in the neighborhood of 1,110-plus rooms within the city,” Mayor Kuhns. “Using some factors as far as occupancy, time of year … room charges, we anticipate the tax may bring in as much as $750,000 in a full year.”

“As of right now, the use of that money would be just toward the general fund. However, we left it open for discussion that in the future we may want to earmark portions of the revenue for specifics,” Mayor Kuhns said.

In addition to the half-dozen municipalities that received the authority to collect the additional tax, state legislation empowered Kent and Sussex counties to enact a lodging tax up to 3 percent on hotels, motels and tourist homes, which are defined in state code as five permanent bedrooms but having no cooking facilities. (New Castle County already had authority to do so.)

Sponsored by State Sen. Ernesto Lopez and State Rep. Pete Schwartzkopf and Rep. Valerie Longhurst, Senate Bill 86 amended the Rehoboth Beach charter to give commissioners the authority to impose and collect a lodging tax. It was signed by Gov. Carney on July 16.

So far, Seaford in Sussex and Dover in Kent County have started discussions on the lodging tax.

Dover City Council voted unanimously in July to table an ordinance that would have raised the lodging tax by 3 percent. Council agreed to hold an additional public hearing on Sept. 10 on the matter and put it to a vote on Sept. 23.
Seaford City Council held the first reading of its ordinance in July 23 and will have a second reading Tuesday, Aug. 13.

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