Among the other things on Gov. Kathy Hochul’s late-summer to-do list is deciding whether to sign a bipartisan bill that would track short-term vacation rental units and compel online platforms such as Airbnb to collect occupancy and sales taxes statewide. To some extent, the bill is worthwhile, but the governor should not approve it in its present form.
While some New York cities and counties already collect these sorts of taxes, the bill would extend the system where they do not already exist. If signed into law, the bill would force property owners who are not already registered locally to list their rental units with the state and update the system on their use. Existing local rental registries, like the one in East Hampton Town, would have to interface with the state program. While the logic behind a so-called Airbnb tax makes sense, the measure itself would create its own set of problems, primarily in the massive record-keeping headache at the state level.
Hotels and inns have collected occupancy taxes for years and turned over the additional fees charged to guests to regional agencies. In Suffolk County, a 3-percent “hotel” tax pays for tourism promotion, an expenditure that seems grossly outdated; social media takes care of the hype these days. Money also goes to cultural programs relevant to tourism and to county museums and parks. Another portion of the tax income is set aside to promote the film industry in the county. Not all New York counties go this route; in Westchester, for example, 85 percent of its accommodation tax is used to meet the needs of the homeless and just the remaining 15 percent is used for tourism.
Also outdated is the idea that short-term rentals are exclusively small, resident-occupied operations. In many places, vacation units are run as business investments. Frequently, these entrepreneurs own more than one property or properties with multiple units — distinguishable from standard smaller inns and hotels in name and size only. Many hide their identity through limited liability companies and other kinds of anonymous partnerships. Short-term rentals are a cause of the shrinking availability of permanent housing. Expanding registries statewide will help officials keep tabs on how much of the housing stock is being used by nonresidents; this could be used to make better policy decisions at the local level.
While the demands made on local services and infrastructure are real, little of the short-term rental income remains in the communities. An effective bill would mandate that some portion of the tax would be earmarked for local police, fire, sanitation, and social services. As it stands, the bill duplicates local efforts and would add to bureaucratic holdups for many property owners. Governor Hochul should not sign it in its present form.