Overview: Are Short-Term Rentals Allowed in Chestertown, MD?

Yes, short-term rentals are explicitly allowed in Chestertown, Maryland. Short-term rental operations are permitted within Kent County and its municipalities, including Chestertown, subject to compliance with applicable county and municipal regulations. The county allows establishments that charge for sleeping accommodations not exceeding 4 consecutive months, with specific tax collection and reporting requirements. Additionally, operators within Chestertown's municipal boundaries must comply with Chestertown Town Code Chapter 138, which includes registration, licensing, and potential additional permitting requirements.

How to Start a Short-Term Rental Business in Chestertown, MD

Step 1: Understand Your Compliance Framework

Short-term rental operations in Chestertown fall under dual jurisdiction - Kent County regulations and Chestertown municipal requirements. You must comply with both levels of government.

Step 2: State-Level Registration and Licensing

According to state regulations, all short-term rental hosts in Maryland must:

• Register with the Maryland Short-Term Rental Commission
• Pay an annual $100 licensing fee
• Obtain commercial liability insurance coverage of at least $1,000,000
• Comply with all applicable building, fire, health, and safety codes

Step 3: County-Level Tax Registration

• Contact the Kent County Office of Finance at (410) 778-7478 or financeinfo@kentgov.org
• Request your account number and activation code for the online tax portal
• Set up your Short Term Rental Tax Portal account at kentcountymd.munirevs.com/

Step 4: Municipal Registration (Chestertown)

• Contact the Town of Chestertown at (410) 778-0500 or office@chestertown.com
• Request specific requirements under Town Code Chapter 138
• Obtain any required municipal registration, permits, and licenses

Step 5: Ongoing Compliance

• Collect applicable taxes (6% state sales tax + 4% Kent County lodging tax)
• File monthly tax reports by the 21st of each month
• Maintain separate reporting for each lodging establishment if you own multiple properties

Required Documents, Permits, Licenses, and Guidelines

State-Level Requirements

• Maryland Short-Term Rental Commission registration
• Annual state license ($100 fee)
• Commercial liability insurance ($1,000,000 minimum)
• Compliance certificates for building, fire, health, and safety codes

Kent County Requirements

• County tax registration through Office of Finance
• Monthly Short Term Rental Tax Reports
• Guest billing that separately identifies short-term rental tax charges
• Separate tax reports for each lodging establishment

Chestertown Municipal Requirements

• Municipal registration and licensing under Town Code Chapter 138
• Additional permits and licenses as required by the municipality
• Compliance with any local zoning and safety regulations

Documentation Checklist

• State registration and licensing certificates
• Commercial liability insurance policy
• County tax registration confirmation
• Municipal permits and licenses
• Property compliance certificates
• Tax collection and reporting procedures documentation

Specific Regulations for Short-Term Rentals

Kent County Regulations (Chapter 152 Taxation, Article III)

Tax Collection Requirements:

• Short-term rental tax must be collected on all charges for sleeping accommodations not exceeding 4 consecutive months
• Tax must be separately identified on guest bills
• Tax collection from paying guests is mandatory

Reporting and Remittance:

• Monthly Short Term Rental Tax Report must be completed
• Tax remittance due by the 21st of each month
• Separate reports required for each lodging establishment
• Late payment interest and penalties may apply (except waived for July 2024 due to system conversion)

Exemptions:

• Nonprofits or governmental associations exempt from sales & use tax are NOT exempt from short-term rental tax

Chestertown Municipal Regulations

• Governed by Town Code Chapter 138
• Registration and licensing requirements apply
• Additional permitting may be required
• Municipal regulatory language is subject to updates and revisions
• Specific fees, inspections, or restrictions may apply

State of Maryland Regulations

• 6% state sales tax on all short-term rentals of 88 nights or less
• Registration with Maryland Short-Term Rental Commission
• Compliance with building, fire, health, and safety codes
• Commercial liability insurance requirements

Tax Structure

• State Sales Tax: 6% on rentals ≤ 88 nights
• Kent County Lodging Tax: 4%
• Total Tax Rate: 10% on applicable short-term rentals

Contact Information

Kent County Office of Finance (County-Level STR Tax Administration)

Physical Address:

• 400 High Street, 2nd Floor, Chestertown, MD 21620

Phone: (410) 778-7478

Email: financeinfo@kentgov.org

Online Portal: kentcountymd.munirevs.com/

Hours of Operation:

• Monday-Friday: 8:30 AM - 4:30 PM

Chestertown Municipal Authority

Physical Address: Contact municipality for address

Phone: (410) 778-0500

Email: office@chestertown.com

Regulatory Authority: Town Code Chapter 138

Other Kent County Municipalities (for comparison)

• Betterton: info@townofbetterton.com, (410) 348-5522
• Galena: info@townofgalena.com, (410) 648-5151
• Millington: millington@millingtonmd.us, (410) 928-3880
• Rock Hall: cbutler@rockhallmd.gov, (410) 639-7611

Important Considerations for STR Investors

Market Performance

Chestertown demonstrates a thriving short-term rental market with:

• Average 45% occupancy rate
• Average daily rate of $410
• Peak seasons during summer and fall
• Revenue surges during local events (Tea Party Festival, Sultana Downrigging Weekend)

Municipal Compliance

• Properties within Chestertown municipal boundaries must comply with both county and municipal requirements
• Municipal regulations may include additional fees, inspections, or operational restrictions
• Stay informed about regulatory updates through municipal communications

Additional Regulatory Considerations

• Homeowners Association (HOA) or Condo Association restrictions may apply
• Compliance with zoning laws is mandatory
• Safety and habitability standards must be maintained
• Regular monitoring of regulatory changes is recommended

Source Links

• Kent County Finance Department STR Information: www.kentcounty.com/government/departments/finance/short_term_rental_information
• Kent County STR Portal: www.kentcountymd.munirevs.com/
• RedAwning Chestertown Market Overview: www.redawning.com/pm/market-overview/chestertown-maryland
• Chestertown Municipal Contact: office@chestertown.com
• Kent County Office of Finance: financeinfo@kentgov.org, (410) 778-7478

Note: This guide reflects regulations as of the information sources provided. Investors should verify current requirements with local authorities before commencing operations, as regulations may be updated or revised.