Dewey Beach is now looking at increasing its 3 percent rental tax to four or even five percent.
Mayor T. J. Redefer told WBOC that the money would provide a way to deal with flooding and rising water levels in the area.
He added that the rental tax would not reach 6 percent.
If the town decides to increase the rental tax it would be subject to a referendum in September.
But there is some opposition.
Realtor Sharon Palmer-Stauffer fears that the tax hike could push tourist away.
She told the television station that currently Dewey has a lower tax rate than surrounding resorts making the town attractive to visitors.
