Bill
HB 1523
HB 1523 raises Howard County’s room tax cap to 8% and allocates all revenue above 7% to the Tourism Council, with 5–7% split unchanged.
Status & effective date
- Jurisdiction: Howard County, Maryland (Public Local Law Ho. Co. 18–25 / bill 5lr2717).
- Effective date stated in the bill: July 1, 2025.
- The bill was introduced by the Chair of the Howard County Delegation and proceeded through the local bill process (committee consideration and reported favorably).
Purpose
- To change the maximum room‑rental (hotel/room occupancy) tax Howard County may impose and to specify how revenues attributable to different tiers of that tax must be distributed to local entities.
Key provisions
- Maximum rate increased: The maximum county room rental (hotel) tax authorized under local law is raised from 7% to 8%.
- Distribution rules by rate tier (subject to the annual county budget and appropriation process):
- For revenue attributable to a county rate greater than 5% but not greater than 7%: distribute two‑thirds to the Howard County Tourism Council and one‑third to the Howard County Economic Development Authority (this maintains the current split for the portion above 5% up to 7%).
- For revenue attributable to a county rate greater than 7% (i.e., the incremental revenue between 7% and the new 8% maximum): distribute that revenue to the Howard County Tourism Council (100%).
- The bill preserves that the county still must adopt any tax rate change by local law and appropriation — the statute authorizes the maximum and prescribes distribution, but implementation is subject to the county’s budget process.
Who is affected
- Howard County lodging operators (hotels, motels, short‑term rentals): potential increased tax collection and tax administration responsibilities.
- County visitors/transients: may face higher effective room charges if the county adopts a higher rate.
- Recipients of tax revenue: Howard County Tourism Council (would receive all new revenue above 7% and the larger share of the 5–7% band) and the Howard County Economic Development Authority (retains one‑third of revenue in the 5–7% band).
- Howard County general fund: the first 5% continues to be allocated as under existing practice (commonly to the county general fund), but the proportion of total room tax revenue flowing to the general fund may change if the county raises rates and redirects new incremental revenue per the bill.
Fiscal impact
- The Department of Legislative Services estimates that, if the county increases the tax from 7% to 8%, Howard County hotel rental tax revenues would rise by roughly $828,600 annually (FY 2026 basis). That incremental revenue would be distributed to the Howard County Tourism Council under the bill.
Procedural / implementation notes
- The bill authorizes (but does not itself impose) an 8% tax; the county must enact a local law and appropriate the revenues consistent with its budget process.
- Effective date: July 1, 2025 — collections or distributions would begin only after the county adopts a rate and on that timeline.
Bottom line
HB 1523 raises the statutory cap on Howard County’s room rental tax to 8% and directs that any revenue above 7% be dedicated to the Howard County Tourism Council, while preserving the existing split between the Tourism Council and the Economic Development Authority for revenues in the 5–7% band. If the county exercises the new authority, the Tourism Council stands to receive the new incremental revenue (estimated ~ $828,600/year if the rate is raised from 7% to 8%).
Compiled from official sources — confirm details with the bill’s official record.
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