Some Jefferson County towns asking for vacation rentals to pay bed tax

Oct. 2—WATERTOWN — A series of town and village boards have asked Jefferson County to consider changing the laws around the occupancy tax it charges hotels, to include short-term vacation rental units.

The occupancy tax, also called a bed tax, is charged to hotels and motels in the county, at 3% of the money they make from room rates, minus some exemptions. The tax generated over $354,000 in 2020, but brought in nearly $521,000 in 2019. That money is split between the county and the towns and villages that host bed-tax paying businesses

Historically, only hotels and motels in Jefferson County have paid this tax. The state has mulled taking action that would tax these rentals, but opted not to do so in the 2021 budget. Other counties across New York have made their own moves to tax AirBnB's, VRBO rentals and any other property rented to guests for terms of less than one month, including St. Lawrence County.

Now, the Jefferson County towns of Clayton and Alexandria, as well as the village of Clayton, have requested that the county expand its occupancy tax as well. The town of Lyme requested such a move in 2021.

"The town board of Alexandria voted unanimously to support Jefferson County in looking into the occupancy tax rules and regulations," reads a letter sent to the county last week from town of Alexandria supervisor Brent M. Sweet. "It was widely discussed and understood that short-term rentals have mushroomed in Jefferson County and something needs to be done so everyone is on a level playing field."

The town and village of Clayton both echoed similar sentiments in their own letters, sent earlier in the month.

"Local hotels, motels and bed and breakfasts have long been the backbone of our regional tourism economy, and they have done so while paying their fair share of local taxes," reads a letter from Clayton town supervisor Lance Peterson. "Not requiring short-term rentals to pay the same taxes as other legitimate lodging entities creates an unfair disadvantage to those who follow the rules within our communities. Even more, municipalities are losing out on tax revenue as most short-term rentals fail to remit these taxes even if it is required by law."

County Administrator Robert F. Hagemann, III said these requests come as the number of short-term rental units along the shoreline of Jefferson County have exploded. Numbers aren't immediately available for every unit in the county, but there are 290 listings for Jefferson County units on just AirBnB, in nearly every town and village.

There's long been talk of a taxing short-term rentals, but county legislators have shown little interest in introducing any new taxes thus far.

"It's clear that the waterfront communities have an interest in moving towards this direction," Mr. Hagemann said. "It's very clear the local hoteliers and motel owners would also like the county to move in this direction, because it evens the playing field a little bit."

Mr. Hagemann said there aren't currently any numbers available on what kind of revenue expanding the occupancy tax would generate, but there is an idea of how the tax would be enforced.

"The VRBO or AirBnB type organizations will enter into an agreement, a contract for service with the unit owners, and that organization will, on a regular basis, forward to the treasurer's office the sales and bed tax collections from their clients over the course of time," he said.

Not everyone is supportive of this suggestion, however. Amanda J. Miller owns a number of rental units around the town of Lyme, where she owns Lake Ontario Realty. Ms. Miller said the idea of "leveling the playing field" between short term rentals and hotels is misplaced.

"The playing field is not level, because AirBnB's were created for a specific purpose," she said. "I can't take my entire family, with pets and cats and kayaks and canoes and cornhole boards to a hotel. It's a different venue altogether."

Ms. Miller said the market for vacation rentals is much smaller than hotels, and the north country's rental unit market is remarkably seasonal, something she said isn't likely as common at area hotels. Ms. Miller said, in the years she's had her units running, she has not yet turned a profit.

"We already pay town and county taxes, and school taxes, and we're paying income taxes on top of the property taxes, so for people to think that we should just eat another tax, and not pass it off to the consumer, they clearly don't understand how these work," she said.

Ms. Miller said she's disappointed that her own town government is advocating for an additional tax on her units.

"It's disappointing, to say the least. We're barely making it, most of us are not turning a profit, and we're just trying to bring good tourism to the area," she said. "Unfortunately, there's a lot of misconception, I think because AirBnB is such a vague, widely-used term right now. The AirBnB's in the north country are not the same as the ones in Florida, or overseas."