Essex Co. changes timeline for bed tax hike
Heeding lodging owners’ cries, Essex County Board of Supervisor Chairman Shaun Gillilland has used COVID-19 emergency powers to alter an upcoming increase to the county’s occupancy tax.
The board voted on April 6 to increase the occupancy tax, or bed tax, from 3% — which it has been since the beginning of 2000 — to 5% starting June 1. In the law, that meant the new tax would apply to any stay at a hotel, motel or vacation rental unit from June 1 going forward, even if it is booked before then.
On Thursday, Gillilland, R-Willsboro, issued a press release announcing he was using state of emergency powers granted amid the COVID-19 pandemic to change that timeline and let the occupancy tax be 3% for all lodging bookings and contracts made before June 1.
In other words, the tax goes with the date of the booking rather than the date of the stay. If you stay in a Lake Placid hotel this July and book it now, you will pay a 3% occupancy tax, but if you book the same stay on or after June 1, you will be charged 5%.
“This measure was instituted at the request of the hotel/motel and tourism residency communities, keeping in mind that many of the larger bookings for the summer season were made prior to June 1st and that to not institute this measure would cause confusion and hurt the industry,” Gillilland said in the press release.
Gillilland said the COVID-19 crisis has “devastated” the hotel and tourism industry. His order changing the bed tax law singles out the Lake Placid area as being particularly hard-hit by the pandemic.
Some hotel owners had gone public with their complaints about the timing of the bed tax increase. In a letter to the editor the Enterprise published April 13, Petra Weber, owner of the Wildwood on the Lake hotel in Lake Placid, wrote, “We all have events and groups and regulars booked and confirmed with deposits. Final amounts due are based on 11% total for state and bed tax. You want us to renegotiate the contracts?” she asked for the start date to be moved back to Jan. 1, 2021.
Ed Palen, owner of the Rock and River lodge in Keene, said in a subsequent letter that more than 60% of his summer and fall bookings had been made before the county board increased the tax.
“Lodge owners can’t ask their guests to pay more than the originally agreed upon,” Palen wrote. “What this ultimately comes down to is that we, the lodge owners, will have to pay this newly increased 2% rate out of our own pockets.” He suggested pushing back the start date until Dec. 1.
A formal proposal to increase the bed tax first surfaced last year, when the Regional Office of Sustainable Tourism offered a plan that would’ve seen the extra 2% directed to a community enhancement fund for local-level projects to accommodate tourism or mitigate its impacts. But while the county awaited authorization from the state to increase the tax, Essex County supervisors decided on a different way to split the 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.
Now with the 2% increase, each of Essex County’s 19 towns will receive an annual minimum of $20,000. Additional money will be directed to towns where more occupancy tax revenue is collected. For North Elba, Wilmington and Keene, where much of the county’s hotel and hospitality industry is located, this will likely mean more money for local-level marketing and tourism promotion.