Gaithersburg, MD Short-Term Rentals: Taxes & Fees (2026)
Key Facts
- Tax rate
- 2% of total room rental charge
- Applies to
- Hotels, defined to include short-term rentals
- Reports due
- Monthly, last day of following month
- Late penalty
- 1%/month interest + 5%/month, capped 25%
- Recordkeeping
- 3 years, subject to director inspection
- Revenue share
- 4% to Montgomery County Visitors Bureau
Summary
Gaithersburg's hotel rental tax, 2% of room rental charges, applies to short-term rentals because Chapter 3A's definition of 'hotel' expressly includes them. Hosts must also remit these taxes as a condition of their short-term rental license.
Hotel: Any public or private hotel, inn, hostelry, motel, rooming house, boardinghouse or other lodging place including short-term rentals within the city, offering sleeping accommodations, that for compensation furnishes sleeping accommodations to any transient... Sec. 3A-2. - Levy. ... (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.
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, Hotel Rental Tax, defines a 'hotel' in Sec. 3A-1(2) as any public or private hotel, inn, hostelry, motel, rooming house, boardinghouse or other lodging place, including short-term rentals within the city, that furnishes sleeping accommodations for compensation to a transient guest staying under 30 consecutive days. Sec. 3A-2 levies a tax of 2 percent of the total room rental charge on every transient, which the hotel (including a short-term rental host) must collect at the time payment is made and hold in trust for the city until remitted.
Sec. 3A-3 requires monthly reports and remittances, due on or before the last day of each month for the prior month's collections, and records must be kept for three years for the director of finance and administration to inspect. Certain rentals are exempt under Sec. 3A-4, such as hospitals, nursing homes, qualifying nonprofit youth organizations, and nonprofit charitable, religious, educational or recreational groups when housing overnight guests isn't the facility's primary use. Separately, Sec. 1(8) makes remitting all local taxes and required fees an express condition of holding a short-term rental license, tying tax compliance directly to the ability to keep operating. The city distributes 4 percent of what it collects in hotel rental tax to the Montgomery County Conference and Visitors Bureau under Sec. 3A-6.
Violations & Fines
Failing to collect, report or remit the 2 percent hotel rental tax draws interest of 1 percent per month plus a penalty of 5 percent per month, capped at 25 percent of the tax owed, under Sec. 3A-5; the failure is also a municipal infraction with a maximum penalty set by city council resolution, and unpaid taxes can jeopardize a short-term rental license under Sec. 18AA-3.1(8).
Frequently Asked Questions
Do Gaithersburg short-term rentals have to charge a hotel tax?
How often does a Gaithersburg short-term rental host file tax reports?
What happens if a host doesn't remit the hotel rental tax?
Is any lodging exempt from Gaithersburg's hotel tax?
Sources & Official References
Other rules in Gaithersburg
How Gaithersburg compares: Cities with the Highest Short-Term Rental Taxes·Compare Gaithersburg to another location·View the Maryland short-term rentals overview
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