Sussex can now tax short-term rentals

Several pieces of legislation that passed or are awaiting Gov. John Carney’s signature from the 152nd General Assembly have a direct impact on Sussex County government.

During Sussex County Council’s July 30 meeting, County Administrator Todd Lawson and Finance Director Gina Jennings discussed the legislation.

Short-term rental tax

House Bill 168 gives the county the authority to collect a lodging tax from short-term rentals, such as Airbnb and Vrbo. Lawson said the county’s accommodations tax ordinance will have to be amended. Collections will start in 2025.

No more than 3% can be collected from short-term rentals in unincorporated areas of Sussex County.

Sussex County has been collecting about $1 million per year from the accommodations tax on hotels and motels in unincorporated areas of the county.

In addition, the number of chambers of commerce permitted to access the fund has been increased to include Greater Millsboro, Greater Milford, Georgetown, Milton and Western Sussex chambers.

Workforce and affordable housing programs have been added to the list of permitted expenditures for the fund. Others are beach nourishment, dredging, economic development, tourism programs, recreational activities, and water quality and flood control projects.

Assessment process

HB 403, drafted by all three counties, updates code to make changes to the assessment process. Lawson said for the first time, county council will be able to select members of the board of assessment review, with membership increased from the five regular members to add three alternates. Council will also be responsible for setting parameters for board members.

Council will make those selections before the end of the year.

In addition, the timetable for appeals has been changed from just the month of March until all appeals are heard. The appeals process begins Feb. 15, 2025.

The legislation also allows the county to appoint a referee to hear appeals.

Rep. Pete Schwartzkopf, D-Rehoboth Beach, was the primary sponsor and Sen. Russ Huxtable, D-Lewes, was one of the bill sponsors.

Fire protection fee

HB 127 gives the county authority to enact a fire protection fee. Lawson said an ordinance would have to be created if council decides to impose the fee. Funds collected from property owners must be kept in a separate account. County officials will establish criteria for how money will be distributed to fire companies. Huxtable was one of the bill sponsors.

Bond bill

Jennings reviewed funds allotted in the Bond Bill affecting the county. She said $1 million above the 30% state reimbursement for paramedics has been added. There is funding for three additional Delaware State Police troopers in the county, $200,000 for the kitchen incubator project, $1 million for the Dewey municipal building where a county paramedics unit will be established, $1 million for the Delaware Coastal Airport runway extension, $50,000 for the airport flight school, $26 million for a new Delaware State Police Troop 4 in Georgetown, and additional funding for fire companies.