Except as provided in § 20–404 of this subtitle, a county may impose, by resolution, a hotel rental tax. This subsection applies only to Calvert County, Charles County, and St. Mary’s County. The governing body of a county shall hold a public hearing before imposing a hotel rental tax. The hearing: shall be advertised twice in a newspaper of general circulation in the county at least 10 days before the hearing; and may not be part of the annual budget hearing.

The hotel rental tax does not apply to the sale of a right to occupy a room or lodgings as a transient guest at a dormitory or other lodging facility that: is operated solely in support of the headquarters, a training facility, a conference facility, an awards facility, or the campus of a corporation or other organization; provides lodging solely for employees, contractors, vendors, and other invitees of the corporation that owns the dormitory or lodging facility; and does not offer lodging services to the general public. By resolution, Calvert County and St. Mary’s County may provide a tax exemption for classes of hotels. In Carroll County, the hotel rental tax does not apply to a hotel with 10 or fewer sleeping rooms. Cecil County may impose the hotel rental tax only on a transient charge paid to a hotel located in any part of Cecil County that: is specified by the governing body of Cecil County as a population center; is not larger than 10 square miles in geographic area; and has a population of at least 6,000 residents. In Frederick County, the hotel rental tax does not apply to a hotel with: 10 or fewer sleeping rooms in its main building; and not more than 20 additional sleeping rooms in auxiliary structures on the hotel’s property. In Washington County, the hotel rental tax does not apply to a transient charge paid to a hotel by: the federal government; a state; or a unit or instrumentality of a state or the federal government.

Subject to this section, the hotel rental tax rate is the rate that the county sets by resolution. The hotel rental tax rate may not exceed: except as otherwise provided in this section, 3% in a code county; 3% in Cecil County; 4% in Talbot County; 5% in Calvert County, Carroll County, Charles County, Dorchester County, Frederick County, St. Mary’s County, and Somerset County; 6% in Wicomico County; and 8% in Garrett County. With the unanimous consent of the county commissioners: a code county other than an Eastern Shore code county or a Western Maryland code county may set a hotel rental tax rate up to 5%; an Eastern Shore code county may set a hotel rental tax rate up to 6%; and a Western Maryland code county may set a hotel rental tax rate up to 8%. The hotel rental tax rate in Washington County is 6%.

A hotel shall: give a person who is required to pay a transient charge a bill that identifies the transient charge as an item separate from any other charge; and collect the hotel rental tax from the person who pays the transient charge. A hotel shall hold any hotel rental tax collected in trust for the county that imposes the tax until the hotel pays the tax to that county as required under this part.

A person shall pay the hotel rental tax to the hotel when the person pays the transient charge.

A hotel shall complete, sign, and file a hotel rental tax return with: except as provided in item (2) of this section, a code county, on or before the 10th day of each month; and Cecil County, on or before the 10th day of each month; Talbot County and Wicomico County, on or before the 20th day of each month; a code county in the Eastern Shore class established in § 9–302 of this article, Calvert County, Carroll County, Charles County, Dorchester County, Frederick County, Garrett County, St. Mary’s County, and Somerset County, on or before the 21st day of each month; and Washington County, on or before the 25th day of each month.

A hotel rental tax return for a county: shall be made on the form that the county requires; and shall contain the information that the county requires, including the amount of: transient charges paid to the hotel during the prior calendar month; and the hotel rental tax required to be collected during the prior calendar month.

A hotel shall pay to the county the hotel rental tax collected for a calendar month with the return that covers that month.

Except in Calvert County, Carroll County, Charles County, St. Mary’s County, and Washington County, a hotel is allowed, for administrative costs, a discount equal to 1.5% of the gross amount of hotel rental tax collected if, on or before the due date, the hotel: files the hotel rental tax return; and pays the hotel rental tax. In Calvert County, Carroll County, Charles County, St. Mary’s County, and Washington County, the county commissioners may determine whether a hotel is eligible to receive a discount.

To provide for the orderly, systematic, and thorough administration of the hotel rental tax, a county may adopt regulations that: are consistent with this part; and conform to the applicable provisions and regulations for the sales and use tax under Title 11 of the Tax – General Article.

The Comptroller shall provide a county with information to help the county verify hotel rental tax liability. The Comptroller may charge a county a reasonable fee for the cost of providing information under this section. The county shall treat the fee as a hotel rental tax administrative cost.

To cover the revenue that a tax collector collects under this part, a county may increase the surety bond that the county requires for its tax collector. The county shall treat any additional premium due to a surety bond increase allowed under subsection (a) of this section as a hotel rental tax administrative cost.

Except as otherwise provided in this part, a code county, Cecil County, Garrett County, or St. Mary’s County shall distribute the hotel rental tax revenue as follows: a reasonable sum for hotel rental tax administrative costs to the general fund of the county; after the distribution in item (1) of this subsection, the revenue attributable to a hotel located in a municipality to the municipality; and the remaining balance to the general fund of the county. Cecil County may not deduct more than 5% of the revenue for administrative costs under subsection (a)(1) of this section. From the part of the balance under subsection (a)(3) of this section that is attributable to a tax rate of 6% or less, Garrett County shall designate a portion for the promotion of the county. If Garrett County imposes a tax rate greater than 6%, the part of the balance under subsection (a)(3) of this section that is attributable to the rate greater than 6% shall be distributed to the general fund of the county. If a Western Maryland code county imposes a tax rate greater than 5%, the revenue attributable to the rate greater than 5% and attributable to a hotel located in a municipality shall be distributed to the general fund of the county.

Calvert County shall distribute the revenue from the hotel rental tax collected under this part to the Tourism Development Incentive Fund, established under this section. There is a Tourism Development Incentive Fund. The Tourism Development Incentive Fund shall be distributed as follows: to the general fund of the county, a reasonable amount for the administration of the hotel rental tax; after the distribution required under item (1) of this subsection, to a municipality, the revenue attributable to a hotel located in the municipality; and the remainder to: subject to subsection (d) of this section, provide grants to businesses and organizations to pay the application and permit fees required by the county to hold a special event in the county; and market Calvert County to potential visitors. Grants provided for under subsection (c)(3) of this section may be awarded only to applicants that meet criteria adopted by the county. After the distributions required under subsection (c) of this section, any unexpended funds at the end of each fiscal year shall be distributed to the general fund of the county.

Carroll County shall distribute the hotel rental tax revenue as follows: a reasonable sum for hotel rental tax administrative costs to the general fund of the county; and the remaining balance to tourism and general promotion of Carroll County.

Charles County shall distribute the hotel rental tax revenue to the general fund of the county.

Dorchester County shall distribute the hotel rental tax revenue as follows: 80% of the revenues attributable to a hotel located in a municipality to that municipality; and the remaining balance to the general fund of the county.

Frederick County shall distribute the hotel rental tax revenue as follows: a reasonable sum for hotel rental tax administrative costs to the general fund of the county; and the remaining balance to the Tourism Council of Frederick County, Inc., with a portion of the balance designated by the governing body of Frederick County to be used for a visitor center. The internal auditor of Frederick County shall conduct an audit of the financial records of the Tourism Council and report the findings to the governing body of Frederick County.

Somerset County shall distribute the hotel rental tax revenue to the general fund of the county.

Washington County shall distribute the hotel rental tax revenue as follows: 50% to the general fund of the county to be used to fund the Hagerstown/Washington County Convention and Visitors Bureau; and the remaining balance to a special fund to be used only to: cover costs for wages, postage, supplies, and legal fees incurred in administering the hotel rental tax; develop tourism attractions; enhance economic development; and support cultural and recreational projects in Washington County. A municipality in Washington County may apply to the County Commissioners of Washington County for funding from the special fund established under subsection (a)(2) of this section for an eligible project within the municipality. Each year before adoption of its annual budget, the Hagerstown/Washington County Convention and Visitors Bureau shall hold a public hearing on the proposed annual budget. On or before November 1 of each year: the County Commissioners of Washington County shall post on the county’s Web site a report on the hotel rental tax revenue collected and the use of the hotel rental tax revenue for the previous fiscal year; and the Hagerstown/Washington County Convention and Visitors Bureau shall report to the County Commissioners of Washington County on the Bureau’s use of the hotel rental tax revenue for the previous fiscal year.

Wicomico County shall distribute the hotel rental tax revenue as follows: a reasonable sum for hotel rental tax administrative costs, not to exceed 5%, to the general fund of the county; if the county authorizes a hotel rental tax rate of 6%: 7% of the revenue to the Salisbury Zoological Park; and 7% of the revenue to the Wicomico County Youth and Civic Center to be used for its improvement and renovation; and the remaining balance to the general fund of the county to underwrite the Wicomico County Convention and Visitors Bureau.

A county shall make the distributions required under this part between the 15th day and the 30th day of each calendar month.

On or before October 1 of each year, a Western Maryland code county shall prepare a report on the hotel rental tax. The report shall be published in a newspaper of general circulation in the county and posted on the county’s Internet Web site. The report shall include: the amount of revenue the county collected from the hotel rental tax in the previous fiscal year; an itemized statement of the use of hotel rental tax revenue; and the name and salary of each position in the county unit that administers the hotel rental tax. A Western Maryland code county shall provide a copy of any audits that relate to the hotel rental tax to the county Senate and House Delegations to the General Assembly.

If a hotel fails to pay the hotel rental tax as required under this part, the hotel shall pay interest on the unpaid tax from the date on which the hotel is required to pay the tax to the date that the tax is paid. The interest rate for each month or fraction of a month is: for Cecil County, Dorchester County, Talbot County, Washington County, and Wicomico County, 1%; and for any other county, 0.5%.

Except in Talbot County or Wicomico County, if a hotel fails to pay the hotel rental tax to a county within 1 month after the payment is due under § 20–410 of this subtitle, the hotel shall pay a tax penalty of 10% of the unpaid tax. If a hotel fails to pay the hotel rental tax to Talbot County or Wicomico County within 120 days after the payment is due under § 20–410 of this subtitle, the hotel shall pay a tax penalty of 10% of the unpaid tax.

A county may file a civil action to collect unpaid hotel rental tax. A county may collect unpaid hotel rental tax by distraint. Except in Calvert County and St. Mary’s County, unpaid hotel rental tax is: a lien against the real and personal property of the person owing the tax; and collectible in the same manner as the property tax may be collected under the Tax – Property Article.

Subject to paragraph (2) of this subsection, to protect hotel rental tax revenue, a county may require a hotel to file security with the county in an amount that the county determines. Cecil County, Talbot County, and Wicomico County may require security under this section only for a hotel that has been in default. Security under this section shall be: a bond issued by a surety company that is: authorized to do business in the State; and approved by the Insurance Commissioner as to solvency and responsibility; cash; or security approved by the county. If security is required under this section, the county shall give the hotel notice of the amount of security. Within 5 days after a hotel receives notice that security is required, the hotel shall: file the security; or submit a written request for a hearing on the security requirement. If a hearing is requested under subsection (c) of this section, the county shall hold a hearing to determine the necessity, propriety, and amount of the security. The determination at the hearing is final. The hotel shall comply within 15 days after the hotel receives notice of the determination. Without notice to the hotel that files security under subsection (b)(2) or (3) of this section, the county at any time may: apply the cash to the hotel rental tax due; or sell the security and apply the proceeds of the sale to the hotel rental tax due.

In this part the following words have the meanings indicated. “Hotel” has the meaning stated in § 20–401 of this subtitle. “Hotel rental tax” means the tax on a transient charge. “Transient charge” means a hotel charge for sleeping accommodations for a period not exceeding 4 consecutive months. “Transient charge” does not include any hotel charge for: services; or accommodations other than sleeping accommodations.

Except as provided in subsections (b) and (c) of this section, a municipality may impose, by ordinance or resolution, a hotel rental tax. In this subsection, “hotel rental tax revenue sharing arrangement” includes: a requirement under §§ 20–415 through 20–422 of this subtitle that a county distribute revenue from a county hotel rental tax to a municipality; or any other hotel rental tax revenue sharing requirement, agreement, or arrangement between a county and a municipality. A municipality in a county that has a hotel rental tax revenue sharing arrangement between the municipality and the county may not impose a hotel rental tax under this part. A municipality may not impose a hotel rental tax if the municipality is located in a county that: distributes at least 50% of total county hotel rental tax revenues to promote tourism in the county; or does not impose a tax on a transient charge paid to a hotel.

Subject to subsection (b) of this section, a municipality shall set the rate of the hotel rental tax. The hotel rental tax for a municipality may not exceed 2%.

A municipality that imposes a hotel rental tax may: provide for the administration and collection of the tax; provide for additional exemptions from the tax; and impose penalties for failure to collect, report, or pay the tax.

A municipality that imposes a hotel rental tax under this part shall distribute to a convention and visitors bureau in the county where the municipality is located at least the same percentage of the hotel rental tax collected that the county distributes to the convention and visitors bureau from any county hotel rental tax.

If a county has the authority under Part I of this subtitle or any other law to impose a tax on transient charges paid to hotels, to accommodate a tax imposed under this part by a municipality, the county may impose a tax rate on transient charges paid to hotels located in the municipality that is lower than the tax rate imposed on transient charges paid to hotels outside the municipality.