Essex Co. weighs 2% bed tax hike
The Essex County Board of Supervisors is getting ready to decide on a long-ago proposed local law that would increase the county bed tax from 3% to 5%.
The county’s bed tax, or occupancy tax, is collected on all hotel, motel, bed-and-breakfast and short-term vacation rental stays. A proposal to increase the tax first surfaced last year, when the Regional Office of Sustainable Tourism offered a plan for the new revenue that would’ve seen the money directed to a community enhancement fund for local-level projects to accommodate tourism or mitigate its impacts.
That, however, is not necessarily what the county proposes to do with the revenue.
Before putting together this local law to increase the tax, the Board of Supervisors was required to first get authorization from the state Legislature. Bills providing the board with that authority to increase the tax were sponsored by state Sen. Betty Little and Assemblyman Dan Stec, both of Queensbury, and passed each chamber last June. The bill was delivered to Gov. Andrew Cuomo on Dec. 17, 2019, and signed a few days later, on Dec. 20.
The local law, if adopted, would only increase the occupancy tax — not outline how the additional revenue would be used. A plan for that revenue would be voted on separately.
“This has been a long time coming,” county Board of Supervisors Chairman Shaun Gillilland said Monday. “I know there are some lodging owners who are against it. I think in the long term, it will be good for everyone in the tourism and hospitality business.”
The Board of Supervisors is expected to take up the issue again at its 10 a.m. meeting on April 6 in Elizabethtown.
Plans for revenue
Currently, ROOST receives 95% of the more than $2 million a year generated through the county’s bed tax. The county Treasurer’s Office keeps 5% to cover administrative costs.
In the months since the idea of increasing the occupancy tax first surfaced, supervisors have discussed different ways to use the additional revenue.
Gillilland, who is also the Willsboro town supervisor, said he believes there’s a consensus among supervisors to direct the new revenue back to towns for local-level marketing and tourism promotion.
“There would be a minimum $20,000 for each town, plus an additional percentage based on the percentage of occupancy tax that was generated from that individual town,” he said.
Towns such as North Elba, Keene and Wilmington would likely receive more money than other towns because they host more tourist accommodations, he added.
ROOST would also collect an administrative fee, according to Gillilland. It’s unclear how much that fee would be.
The Board of Supervisors held a public hearing on the proposed 2% occupancy tax increase in Elizabethtown last week. At least two people from Lake Placid attended, but only one person spoke, according to meeting minutes: Denise Dramm, a Lake Placid resident and owner of the Placid Bay Inn.
Dramm asked supervisors to table the proposal, pointing to a number of concerns, including what she sees as a major discrepancy in the amount of taxes hotel owners are required to collect from visitors versus what short-term vacation rental owners collect. She noted that vacation rental owners aren’t collecting state sales taxes.
“This gives them an edge, and if you look at the figures from your own treasurer on collection of the bed tax, you will see that slowly hotels and motels, B&Bs are going down,” she said. “The bed tax is going down slightly every year and the vacation rentals are exploding in an upward revenue.”
Asked to verify Dramm’s assertions about the county’s bed tax collections, the county Treasurer’s Office did not respond by deadline.
Dramm said she has lived in the area for 40 years, and in that time she’s been vocal about some things, but the proposal to increase the occupancy tax and “all the other issues” have prompted her to come forward.
“Unfortunately, I could not talk others to come here today before you because they feel it’s a lost cause, that you aren’t listening to them and you do not understand the hurt that places in Lake Placid are feeling,” Dramm said.
“The local person isn’t paying this (tax). Their customer is paying this, just like my customer is paying this,” she said. “So I implore you to please table this 2% at this time and look at more creative and possibly better ways of leveling the playing field for hotels and motels, and also garnishing more income for each one of your towns.”
Josh Meltzer, head of New York policy for Airbnb, said the company supports legislation that would give the platform the authority to collect sales tax.
“For the past four years, Airbnb has supported legislation authorizing short-term rental platforms like ours to collect state and municipal sales taxes,” he said in a statement. “Under this bill, every time a guest books a trip to New York, we would be able to include the taxes in the checkout process and then remit them to the appropriate tax authorities — which we estimate would generate at least $130 million in annual tax revenue from Airbnb alone. We are committed to working with state legislators to hopefully make statewide tax collection a reality this session.”