Maryland industry groups oppose new hotel surcharge and increased property taxes

The Maryland General Assembly's Environment and Transportation Committee convened on March 4, 2025, to discuss a proposed bill that has sparked significant opposition from various sectors, particularly the building and hospitality industries. The meeting highlighted concerns over the financial implications of the bill, which aims to raise revenue through increased taxes on real estate transactions and a proposed surcharge on hotel stays.

Bob Enton, representing the Maryland Building Industry Association, voiced strong opposition to the bill, emphasizing the timing of its introduction amid a broader state effort to raise approximately $4 billion through tax increases. He pointed out that the proposed legislation would add a tax burden on real property transfers, which could adversely affect businesses already struggling with rising costs. Enton argued that this was not the right moment to impose additional taxes, given the current economic climate.

Mark Feinroth, speaking on behalf of the Greater Baltimore Board of Realtors and the Maryland Hotel and Lodging Association, echoed these sentiments. He raised alarms about the potential impact on commercial properties, which are still recovering from the pandemic's effects. Feinroth noted that adding taxes during a time of high vacancy rates in commercial real estate could further hinder recovery efforts.

Amy Rohrer, representing the Maryland Hotel Lodging Association, specifically criticized the proposed 1% surcharge on hotel stays. She highlighted that Maryland already has some of the highest hotel taxes in the nation, and increasing these rates could deter visitors, especially as the industry has not yet returned to pre-pandemic occupancy levels. Rohrer provided data indicating that the hotel sector in Baltimore City alone experienced a significant drop in occupancy, resulting in substantial unrealized revenue for the city and surrounding businesses.

Elizabeth Dellons from Crestline Hotels also expressed concerns about including hotels in the bill, arguing that the region's hotel industry has not seen the same recovery as other areas. She emphasized the need for competitive tax rates to attract business, particularly in light of challenges posed by aging infrastructure and competition from other cities.

The committee's discussions also touched on the potential competitive disadvantage that hotels could face if short-term rentals like Airbnbs are not subjected to the same tax increases. This concern was raised by committee member Dahlia Huey, who questioned whether the bill would create an uneven playing field between traditional hotels and short-term rental properties.

As the meeting concluded, the committee members were left to consider the implications of the proposed tax increases on the state's economy, particularly in the hospitality and real estate sectors. The discussions underscored the delicate balance lawmakers must strike between generating necessary revenue and fostering a competitive business environment in Maryland. The outcome of this bill could have lasting effects on the state's economic recovery and growth in the coming years.