Ulster comptroller says Airbnb could be paying bed tax; Legislature chair blames the state

Airbnb is constant. Sign up for it any point, put your site in dormancy, and the requests still come in, especially on the off-chance that you have something to offer come the summer. The Hudson Valley and Catskills are hot, and for many escaping New York City, or headed here from elsewhere to see what all the buzz is about, short term rentals are the best way to get out into the communities many are thinking of one day joining.

According to Ulster County Comptroller Elliott Auerbach, however, equally constant is our local legislature’s reluctance to look at Airbnb and its other shared economy home rental upstarts’ presence as a key economic force. He points out that it’s been over a year since he submitted legislation to add short-term and vacation rentals to the county’s “bed tax” laws, and even longer since he reached an agreement with Airbnb management for the industry giant to start voluntarily tracking, collecting, and paying such income to the county.

Ulster County Legislature Chairman Ken Ronk (R-Shawangunk) countered the comptroller this week by noting that instead of reluctance, what’s been holding things up are legal details. He’s waiting for Albany to okay the county’s plan to collect the local bed tax from a third party, as in the West Coast-based shared economy giant Airbnb.

But Airbnb’s New York/New England Press Secretary Peter Schottenfels says that the company is already engaged in the process elsewhere in New York.

“Airbnb already has tax collection agreements in place in twelve counties in New York including Dutchess, Sullivan and Delaware Counties,” said Schottenfels. “An agreement here could be a huge revenue boost for Ulster County, and we are ready to start as soon as they give us the green light.”

Asked if those already collecting from Airbnb had to wait for state approval, Schottenfels said, “That has not been the case with other counties.” He did say that the current slowness of action in Ulster County is basically pro forma for an industry still working out its kinks, legislatively, around the state and nation, and that it’s just such issues that will be raised at a state capitol lobbying day being set up for early May.

Ronk sees it differently. “What they’re doing in the other counties is collecting a fee and not the tax. They are settling with a ‘voluntary collection agreement’ and my concern with going that route is that the Airbnb operators will still technically owe the county a bed tax. It may cost more to take the proper steps to change the law but I’d rather do this the right way.”

But Auerbach wasn’t shy about assigning blame. “The Legislature is still dragging its feet on the Airbnb matter while neighboring counties (including Sullivan) have embraced the sharing economy model and are reaping the benefits (ie: bed tax).

“Using Airbnb numbers we estimated that the county would realize over $250,000 annually; money that could be reinvested into tourism, shared with municipalities to address local concerns and reduce taxes.”

Caught by phone this week, Auerbach said he’d counted over 1000 short-term rental units around the county servicing 54,000 visitors at the minimum. While the majority of those were in Woodstock, Kingston and New Paltz, the phenomenon was growing in Saugerties, Stone Ridge and elsewhere. But according to him, the legislature wasn’t buying it.

“I think we’re asleep at the wheel,” he said. “This was the big issue at the state’s Association of Towns meetings two years ago and here we have legislators who still don’t believe it’s a real economic force. They’re comfortable with the hotel and motel laws as they are, and aren’t ready to acknowledge the changes that the sharing economy are bringing our way. Over a dozen counties have laws like I have proposed already. It’s myopic thinking.”

 

Backdoor state law?

Ronk, meanwhile, said the comptroller was refusing to consider that proper process takes time. He said Auerbach’s proposal and Airbnb negotiations were an attempt to “get us to backdoor state law” and could put the county at risk of being sued from Airbnb landlords.

“We are trying to get state authority to collect our bed tax from a third party,” the Legislature Chairman said. “Right now, those renting through Airbnb have to pay the county occupancy tax, but because of how home sharing works we can’t be certain everyone is paying by the normal ways we do bed tax. 200 rooms at a Hampton Inn is easy; they’re used to paying the bed tax, as are traditional bed and breakfasts. We don’t have the authority at present to accept the Airbnb offer.”

The comptroller said the income from Airbnb alone could go a long way to helping local towns shift their zoning laws to better regulate short-term rentals. He said Woodstock had found a means of applying its existing laws to stipulate short-term rentals only be for owner-occupied premises, with everything else considered a hotel, and referenced issues that had arisen in Shandaken and Kingston.

Ronk added that he’s been speaking with state senators about the authority he wants.

“I imagine that before they adjourn in June we’ll be able to get that authority,” he said of the Republican side of the state legislature.

“We’re going to start gently nudging this forward again,” says Auerbach. “I think part of the problem may have been that I proposed it, and for many in the legislature I’m seen as having horns.”