Gaithersburg, MD Hotels & Lodging: Transient Occupancy Tax (2026)
Key Facts
- Tax rate
- 2% of room rental, § 3A-2(a)
- Covers
- Hotels, motels, rooming houses, short-term rentals
- Remittance deadline
- Last day of each month, § 3A-3
- Record retention
- 3 years, § 3A-3(b)
- Late penalties
- 1%/mo interest + 5%/mo, capped 25%
- Revenue share
- 4% to County Conference & Visitors Bureau
Summary
Gaithersburg levies a 2 percent tax on room rental paid by every transient guest at a hotel, motel, rooming house or short-term rental in the city under City Code § 3A-2. Hotels collect the tax in trust and remit it monthly to the director of finance and administration.
(a)There is levied and imposed on each and every transient a tax at the rate of two (2) percent of the total amount paid for room rental to any hotel, by or for a transient, for sleeping accommodations. (b)Every hotel receiving any payment for room rental with respect to which tax is levied shall collect the amount of tax imposed by this chapter at the time payment for the room rental is made. The taxes required to be collected by this chapter shall be deemed to be held in trust by the hotel required to collect the tax until remitted as required by this chapter. (c)Whenever any hotel required to collect and pay to the city a tax under this chapter shall cease doing business or otherwise dispose of its business, any tax payable under this chapter to the city shall become immediately due and payable and the hotel shall immediately make a report and pay the tax due.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: Code of Ordinances: Supplement 52 Update 1).
Full Breakdown
Chapter 3A defines a taxable stay as under 30 consecutive days and defines 'hotel' to expressly include short-term rentals within the city, so an STR operator collects the same 2 percent room-rental tax as a traditional hotel under § 3A-2(a). The hotel holds the collected tax in trust and must remit it with a monthly report, due by the last day of each month for the prior month's collections, and keep supporting records for three years for the director's inspection under § 3A-3. If a hotel ceases business, any tax owed becomes immediately due and a final report and payment are required at that point.
Section 3A-4 exempts room rentals at hospitals, medical clinics, nursing or rest homes; certain nonprofit educational lodging for youth leadership programs; and stays at nonprofit charitable, religious, educational, recreational or literary organizations other than country clubs, when the facility is not primarily used to house overnight guests. Of the tax collected, the city distributes 4 percent to the Montgomery County Conference and Visitors Bureau under § 3A-6.
Violations & Fines
A hotel that fails to remit the tax or file a proper report faces interest at 1 percent per month on the unpaid tax plus a penalty of 5 percent per month, capped at 25 percent of the tax total, under § 3A-5(a). If a hotel fails to collect or report, the director estimates the tax due, mails a demand, and payment is owed within 10 days. Violations are municipal infractions enforceable under § 1-9, with each violation a separate offense and the maximum penalty set by city council resolution; the city may also seek injunctive or mandamus relief, and a conviction does not excuse payment of the tax, interest and penalties owed.
Frequently Asked Questions
Do short-term rentals in Gaithersburg have to collect the hotel tax?
What is Gaithersburg's hotel rental tax rate?
Are any stays exempt from the tax?
What happens if a hotel doesn't pay the tax on time?
Sources & Official References
Other rules in Gaithersburg
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Transient Occupancy Tax in Nearby Cities
How other cities in Montgomery County handle transient occupancy tax.