Resistance To Revised Occupancy Tax In Essex County
In November, Essex County Supervisors approved extending the county occupancy tax to include private rentals effective January 1st. Now officials are finding that a number of property owners are resisting paying the tax or are unaware they are supposed to pay it.
While hotels and motels in the rural Adirondack county were paying a 3 percent occupancy tax, many private rental outlets like boarding houses, cabins, tourist homes, vacation rentals and personal residences were not. Moriah Town Supervisor and Finance Committee Chair Tom Scozzafava says the Board changed the law after hotel and motel owners called for fairness. “A lot of this came from the hotel and motel owners in cabin rentals and so on and you know they wanted to level out the playing field. And I do agree with that. If they have to charge a bed tax to a customer then anybody else that is renting rooms out for short term stays should also be obligated to pay that bed tax. So it was more I think as a effort to increase fairness to level the playing field for anybody in that business.”
But an article in the Plattsburgh Press Republican this week reports that only 92 of an estimated 800 to vacation rentals had registered their properties and are paying the occupancy tax.
Essex County Board of Legislators Co-chair and Occupancy Tax Committee member Randy Preston admits there are people resisting. “This specifically was put in place to cover vacation rentals, which has exploded not only here, I mean it's all across the nation. But here I mean there's an explosion. I mean the amount of vacation rentals in Wilmington is certainly eye-opening compared to the amount of you know hotel rooms. There are people that are resisting for one reason or another. There's people that quite frankly don't know about it and we're trying to educate the public. And it is the law.”
Preston adds that in the first year enforcement will not be heavy handed, in part because he notes that the county dropped the ball informing businesses and residents about the details of the new law. “We have to address the education part of it first. That's the way I look at being fair. We did not do a good job at the education part of it because most of these people aren’t people that live here and notices should have went out in the tax bills. And because of that I think we need to spend this year doing educating and then if there's people that flat out dig their heels in then I think it's time to take action.”
There are no estimates as to how much revenue has been lost, but some estimate the additional tax could generate between $250,000 and $1 million annually. Ninety-five percent of the money goes to marketing the county. Lake Placid-based Regional Office of Sustainable Tourism President Jim McKenna says from the beginning of the year until now, they have lowered the budget line item from the private rental industry due to the lower revenues. “Over the last ten to twelve maybe fifteen years there's been a growing market for the rental industry. We've also seen a tremendous increase in what we call third party providers which is like vacation rental by owner, AirBnB, and others that are now marketing the private rental industry. What the county has initiated this year is that occupancy tax on the private rental. And we're anticipating that there will be a little bit of a build up time and once the private rental industry starts understanding how these revenues will be used we feel pretty confident that this will be growing like the traditional occupancy tax.”
Essex County collects about $2 million annually from an occupancy tax on hotels and motels.