Maryland Provides Guidance on Home Amenity Rental Sales and Use Tax

By Saleem A. Shareef

The Maryland Comptroller’s Office has provided guidance on the home amenity rental sales and use tax that is effective July 1, 2024. (Technical Bulletin No. 46, Home Amenity Rental Sales and Use Tax, Maryland Comptroller’s Office, 05/01/2024.)

Home amenity rentals.

A home amenity is any portion, indoors or outdoors, of a residential property that is occupied by the hour for not more than 15 consecutive hours. A home amenity does not include a bedroom, or any portion of a residential property intended for sleeping quarters. Examples of home amenity rentals include, but are not limited to, a backyard swimming pool, a backyard pickleball court, or an apartment building’s clubroom or rooftop deck. A home amenity rental is the temporary use, in exchange for consideration of any kind, of a home amenity. A “home amenity rental provider” is a person who owns, operates, or manages a home amenity and makes the home amenity available for rental. A “home amenity rental platform” is an internet-based digital entity that advertises the availability of home amenities and receives compensation for facilitating reservations or processing booking transactions on behalf of the owner, operator, or manager of a home amenity. A “home amenity rental intermediary” is a person, other than a home amenity rental provider, who facilitates the sale or use of a home amenity and charges a buyer the taxable price for the home amenity rental. Facilitating includes brokering, coordinating, or in any other way arranging for the sale or use of a home amenity by a buyer. A marketplace facilitator is a person that facilitates a retail sale, including a rental, by listing or advertising for sale in a marketplace, collecting payment from a buyer, and transmitting the payment to a marketplace seller. A marketplace can be either online or a physical marketplace.

Collection and remittance.

Beginning July 1, 2024, the sales and use tax is imposed on home amenity rentals in Maryland at a rate of 6% of the taxable price. Home amenity rental providers, home amenity rental platforms, and home amenity rental intermediaries are considered vendors and are responsible for collecting and remitting Maryland sales and use tax on home amenity rentals in Maryland. The taxable price is the full amount of consideration paid by a buyer, excluding any tax that is remitted to Maryland or to a local jurisdiction, and excluding any commission paid by a home amenity rental provider to a home amenity rental intermediary or platform. Failure to collect and remit the tax can result in the comptroller holding the provider, as well as the intermediary or platform, liable for the unpaid tax. Additionally, if a home amenity rental provider uses an intermediary or platform and also makes direct sales (i.e., rents directly to a buyer), then the provider is required to collect and remit the tax from their direct sales to buyers.

Rentals directly to buyers: When a home amenity is rented directly to a buyer, and not through an intermediary or platform, the home amenity rental provider must collect the tax and remit it to the comptroller on their next Maryland sales and use tax return. A home amenity rental provider is not required to collect and remit the tax if: (1) the home amenity rental provider uses a home amenity rental intermediary or platform; and (2) the intermediary or platform collects and remits the tax on the sale. However, the provider is responsible for verifying that the intermediary or platform has collected and remitted the tax.

Rentals through intermediaries or platforms: Home amenity rental intermediaries and home amenity rental platforms are required to collect and remit the tax on each transaction they facilitate. Home amenity rental intermediaries and home amenity rental platforms must complete the Maryland sales and use tax return. A home amenity rental intermediary or platform that is also a marketplace facilitator must also complete the marketplace facilitator portion of the sales and use tax return.

Licensing and recordkeeping requirements.

Vendors are required to register and obtain a sales and use tax license. Home amenity rental providers, intermediaries, and platforms are required to keep records of all sales and sales for use of home amenity rentals and retain the records for a minimum of four years. Records must include the taxable price on which the sales and use tax is computed and, in the case of a sale for use, the total value of the home amenity rental subject to the sales and use tax.