Lewes Mayor and City Council passed a resolution May 8 to oppose House Bill 130, which would impose an 8 percent tax on short-term rentals. NICK ROTH PHOTO If state legislators pass a bill to implement an 8 percent tax on short-term rentals, the city of Lewes is expected to lose out on most of its $450,000 income from vacation rentals.
Lewes code prevents city officials from imposing a tax on property owners if the state taxes for the same service, meaning Lewes would lose all of the revenue it receives from its 5 percent gross rental receipts tax on rentals of fewer than 120 days.
Councilwoman Bonnie Osler said the tax, if approved, would seriously undermine the fiscal health of the city and add a financial burden to property owners who will see their taxes increase from 5 percent to 8 percent.
“The state should not deprive the city of Lewes, as well as other coastal towns in eastern Sussex, of needed revenue in order to address the state of Delaware’s fiscal situation,” said Osler, reading from a resolution she drafted for council.
The state is facing a $400 million deficit, and Gov. John Carney has been searching for ways to bridge […]