The year-round population of 5,200 hosts 4 million visitors. Some residents are urging the town to challenge a state law prohibiting local lodging taxes.
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In Bar Harbor — where a year-round population of 5,200 hosts 4 million visitors to Acadia National Park — a task force is exploring the potential for a local lodging tax to help pay for the wear and tear on tourism-related infrastructure and services such as sidewalks and public restrooms, street cleaning and the need for a summer police force.
Maine already has a 9% statewide lodging tax on short-term rentals and hotels. An additional lodging tax imposed by the town would be a type of “local option” tax.
Local option taxes are not allowed under Maine law. A municipal lodging tax could only be considered if Maine were to enact legislation authorizing municipalities to adopt one or more local option taxes by local referendum or town council resolution.
Property tax relief
A local option tax could potentially provide property tax relief for residents, Ben Nussbaumer, director of strategy and competitiveness at Arlington, Va., economic development consultant J.E. Austin Associates, told Bar Harbor’s sustainable tourism management task force earlier this month.
The town council established the task force in January 2025. It first met in July 2025.
The goal is to achieve a balance between economic, environmental and social well-being while continuing to build and expand the thriving tourism industry.
Bar Harbor is looking to balance its residential small-town lifestyle with a robust tourism economy that results from being a gateway community to Acadia and a tourist destination in its own right.
“I think we should advocate for the local option tax,” said Enoch Albert, a member of the task force.
Based on a study of lodging revenue in 2024, a 1% lodging tax could generate $1.5 million and a 2% tax could generate $3 million, according to Nussbaumer’s presentation.
Although the tax would mean higher lodging costs for guests, the task force said it was unlikely to deter visitation, although they noted there was likely a threshold to stay within in order to keep the tax from becoming a competitive disadvantage.
“When I go for vacation, I pay the taxes,” said Albert. “I don’t say, ‘wait a minute, there’s a 2% tax here; what’s that for?’”
The task force advocated for forming a broader coalition of municipalities and organizations to draft and present legislation.
If state legislation were enacted by mid-2027, Bar Harbor could draft an ordinance that fall, followed by public hearings, a municipal referendum and the potential to collect taxes in 2028.
