County keeps pushing to tax, register short-term rentals
LAKE PLACID — There are more than 700 short-term vacation rentals here. They surround Mirror Lake. They rise above, lie below and surround storefronts along the Main Street and Saranac Avenue business districts. They’re scattered throughout traditionally residential neighborhoods around the village.
A lot of those properties aren’t registered with Essex County. They also may — or may not — be paying occupancy taxes.
The county collects a 3% occupancy tax, also called a “bed tax,” every time a person stays in a hotel, motel or bed-and-breakfast here. The law was extended to include short-term vacation rental stays in 2016.
Ever since then, Wayne Taylor, director of Weights and Measures for Essex County, has been trying to identify and reach out to rental owners who may not be in compliance with the law.
Here are some of the things that make enforcement of the county’s occupancy tax law difficult: a patchwork of collection agreements, the decision of some online platforms to keep user information confidential, property owner education challenges and the continuing growth of the vacation rental market, with new listings popping up every month.
“It is a slow process, just to make sure I don’t contact someone that’s registered already,” Taylor said.
There are at least 706 active vacation rentals that list Lake Placid addresses, according to AirDNA, a platform that aggregates online vacation rental data. Throughout his search, Taylor has found that in Lake Placid alone, nearly half of all rentals — around 45% — haven’t been registered with the county Treasurer’s Office.
This discrepancy calls into question whether many of those properties have been paying occupancy taxes.
The 3% tax is substantial because vacation rentals are a lucrative business.
On one of the most popular platforms, Airbnb, Essex County continues to attract the most visitors in the North Country region. Its total guest arrivals this summer dwarfed that of Clinton, Franklin, Jefferson, Lewis or St. Lawrence counties, and were more than all of theirs combined.
According to data provided by Airbnb, 26,100 people stayed at rentals in Essex County between Memorial Day weekend and Labor Day this summer. That accounts for more than 51% of the total arrivals to the North Country region in that same period. Franklin County, which drew 7,800 visitors this summer, is the closest second.
Airbnb says its hosts in Essex County garnered $5.2 million in income through its platform this summer, and Franklin County hosts earned $1.4 million.
The county wants to make sure those hosts, along with the owners of rentals listed on other online platforms, are paying occupancy taxes.
Regardless of whether a property owner rents out an entire home, a single room or a shared room, and whether they list their property on Airbnb, VRBO or other platforms, they’re still required to register with the county, according to Essex County Treasurer Michael Diskin.
Some online platforms, like Airbnb, have voluntary collection agreements with the county. Airbnb specifically has been automatically collecting taxes on behalf of property owners since 2016: The tax is added to the bill for each booking in areas where these agreements exist. Airbnb also has a built-in mechanism that allows its “hosts,” as the company calls them, to view how much tax revenue their property has generated.
Between Oct. 1, 2016, and March 31 of this year, Airbnb alone has collected and remitted roughly $500,000 in occupancy taxes to Essex County, according to Liz DeBold Fusco, northeast press secretary for Airbnb.
But the company also keeps user information from Essex County, according to Diskin. The county receives monthly checks from Airbnb, but they aren’t itemized.
That means that the county has to rely on the platform to accurately remit the correct amount of occupancy taxes, and the county can’t independently cross-reference who is registered with who is paying.
“They don’t give us a list of who they’re paying for,” he said. “They don’t do that for anybody.
“We don’t know exactly who they’re paying for.”
Further complicating the occupancy tax collection process: Not all platforms have voluntary collection agreements like Airbnb. Some platforms opt to leave rental owners responsible for collecting the tax on their own.
“VRBO doesn’t participate like Airbnb,” Diskin said. “Users of that platform have to remit their own money.”
Registering the unregistered
Taylor uses a variety of methods to identify vacation rentals: his own observation as he drives around the area, newspaper listings, signs along the road, word of mouth and recently, an online platform called STR Helper.
STR Helper — which was recently purchased by a larger company, Host Compliance — automatically monitors more than 20 rental websites as well as local real estate management websites. It cross-references those listings with the county’s data on registered property owners, and it flags those it believes may be in noncompliance with the law, according to the platform’s website.
Overall, when he contacts short-term rental owners to ask them to register, most are apologetic and say they weren’t aware of the county’s law, Taylor said.
“The majority of them have been receptive and have been very decent about it,” he said. “Most of them are really willing to comply and do so relatively quickly.”
Registration forms are available online on the county treasurer’s website under the “forms” tab, or forms can be requested by mail by calling 518-873-3310.
Taylor said if a vacation rental owner doesn’t register and doesn’t remit occupancy taxes, it’s treated as “a criminal matter” under the law.
“It can be handled as a crime,” he said.
Taylor’s findings in Lake Placid could be reflective of a larger trend of unregistered rentals.
Countywide, there are 556 registered vacation rental owners, he said. But according to AirDNA data, there are roughly 1,311 active rentals in towns, villages and hamlets throughout Essex County.
Diskin said the county’s search-and-contact approach has been effective. His office is receiving new registrations all the time.
“It’s beginning to work, and we’re getting more registrations in for those that weren’t registered before,” he said.
But the numbers suggest there’s still a long way to go.