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SB 803

Relating to data centers

2025 Regular Session Introduced by Scott Fuller and 2 co-sponsors

SB 803 ends Talbot County's 120-day grace for hotel tax payments; hotels must pay delinquent tax within 1 month or face a 10% penalty, effective July 1, 2025.

To Economic Development
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Bill Summary · SB 803

SB 803 — Talbot County — Hotel Rental Tax — Time of Penalty for Nonpayment

Status: Introduced; assigned to Budget & Taxation. Hearing held May 23, 2025 (committee held bill under submission). Effective date (if enacted): July 1, 2025. Cross-file: HB 570.

Main purpose

SB 803 shortens the period Talbot County has allowed hotels to remit overdue hotel rental tax before a late‑payment penalty may be imposed. The bill aligns Talbot County’s penalty timing with the 1‑month standard that applies in most Maryland counties (leaving Wicomico County as the remaining county with a 120‑day allowance).

Key provisions

  • Amends Article — Local Government, § 20‑426:
    • Removes Talbot County from the special 120‑day grace period that currently applies to Talbot and Wicomico counties.
    • As amended, Talbot County hotels must pay any delinquent hotel rental tax within 1 month after the payment due date or incur the statutory penalty.
  • The statutory penalty remains a 10% penalty on the unpaid tax (existing law).
  • Effective date: July 1, 2025.

Who is affected

  • Primary: Hotels and lodging operators in Talbot County (including inns, B&Bs, short‑term rentals subject to the county hotel rental tax).
  • Secondary: Talbot County government, municipalities within Talbot County, and entities that receive shared hotel tax revenues (municipal allocations, tourism boards).
  • Small business impact is expected to be minimal overall, but individual lodging operators who remit late may face penalties sooner.

Fiscal and administrative impacts

  • Local (Talbot County) effect: Positive net fiscal effect expected — improved timeliness of collections, potential increase in penalty revenue, and better cash flow for county and municipal distributions.
    • FY2025 baseline: Talbot County projected hotel tax receipts of about $1.8 million at the current 4% rate; approximately $1.35 million of that is distributed to municipalities.
  • Administrative: County officials expect reduced administrative burden from fewer long‑outstanding delinquencies and improved reporting of gross receipts used for tourism and grant applications.
  • State fiscal effect: None.

Background / context

  • Under current Maryland law most counties impose a 10% penalty if a hotel fails to pay within one month of the due date. Talbot and Wicomico counties have an exception allowing 120 days. SB 803 removes Talbot’s exception so the one‑month rule will apply there.

Procedure / timeline

  • Introduced and first read in early 2025; assigned to the Senate Budget & Taxation Committee.
  • Placed on the Appropriations “suspense” file in April 2025 and held under submission after the May 23, 2025 committee hearing.
  • If passed by the General Assembly and signed, the law would take effect July 1, 2025.

If you want, I can:
- Draft a one‑page explainer for Talbot County hoteliers on compliance steps to avoid penalties; or
- Summarize HB 570 (the companion bill) and compare any differences.

Compiled from official sources — confirm details with the bill’s official record.

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