bed tax

Genesee County is required to extend Local Law Introductory No. 1, Year 2019 – the statute that governs how the municipality applies its hotel/motel room occupancy tax – by Sept. 30, and it will do so either with or without a revision to include online booking platforms, such as Airbnb.

County legislators, Manager Matt Landers and Attorney Kevin Earl continued an ongoing discussion of the topic during Wednesday’s Ways & Means Committee meeting at the Old County Courthouse, and this time included Erik Fix and Kelly Rapone, president/chief executive officer and tourism director, respectively, for the Genesee County Chamber of Commerce.

Fix and Rapone emphasized a changing landscape when it comes to travelers’ lodging, citing a 47-percent increase in Airbnb business since 2018.

“It’s safe to say that the law that was established in 1995 (the original year of the Local Law), doesn’t necessarily hold true today,” Fix said. “The landscape for how folks utilize our community from a visitor’s standpoint has changed … So, what we put in place 25 years ago, doesn’t really apply to those people today.”

Fix added that the goal is to come up with a formula to change the bed tax law to include booking sites where folks can book rooms (people’s homes, apartments, cottages, cabins, etc.) for a night or a week – “however we see fit, based on the changes that have taken place.”

Rapone said that homeowners and some businesses are reaping economic benefit of making rooms available on a short-term basis. Currently, these people are not subject to the 3-percent occupancy or bed tax, as it is called, that applies to hotel and motel guests.

She said she found 17 local listings on the Airbnb website (actually 23 as of today).

“And it’s not just private homes that you’ll find there,” she said. “Some businesses, hunting preserve and Farmer’s Creekside Inn, which has five guest rooms. Rates range from $40 per night to $500 per night for a really nice property on Horseshoe Lake, and weekly rates are offered.”

She reported that she contacted two Batavia-area hoteliers and both are in favor of the legislation being changed.

“They feel that these other lodging options out there have an unfair advantage (compared) to some of the costs of operating that they have, particularly insurance, franchise fees, sales tax and, of course, the bed tax,” she said.

Rapone also noted that Airbnb and similar lodging options were seeing 80- to 90-percent occupancy while hotels see 65 to 75 percent in their peak months.

“So, from the hoteliers' perspective – two of them representing three properties – they’re very much in favor of this. Not that they’re in favor of more tax and more laws, but for them this is an advantage for other people,” she said.

She said that Airbnb has agreements with about 30 other New York counties and, it was later noted, that the company previously reached out to Genesee County leaders about forging a contract here.

The sticking point as far as a revision of the Local Law is the number of rental units and the length of stay.

Back in March, Earl proposed changing the law so that it would apply to less than six units, but only under circumstances when they are rented for more than 10 nights during an entire calendar year.

“It has to be less than six units and likely just one since houses are being rented out – so anything would be eligible,” Earl said. “I wouldn’t think we’d want to include somebody that rents the house out for a weekend to a cousin. We’re thinking a minimum of 10 or 14 (nights) per calendar year; a money-making proposition.”

Rapone said her research reveals that Airbnb’s arrangements with other counties generally focused on 29 nights being considered as a nonresident, but found some that go up to 90 days at seasonal summer destinations.

The bed tax that is imposed is a levy on top of the 8 percent sales tax. Rapone said the bed tax is charged only to visitors, not county residents. She said that 60 percent or more of the bed tax revenue goes to the Chamber for marketing and advertising the county’s assets, with up to 40 percent earmarked for administration.

Fix noted that Airbnb is one of multiple booking websites (Vrbo is another), and that any change in the law would affect all of them.

Landers said the county can’t contract with Airbnb because most of their rentals are one, two and three unit rentals, which currently aren’t covered by the local law.

“So, if we want to have an agreement with Airbnb, we have to change the Local Law,” he said. “It expires at the end of September … I think the time is right.”

He compared it to imposing sales tax on internet retailers, which was done after lobbying from the brick-and-mortar stores. He also said that lawmakers are taking their time on this issue in an attempt to prevent "any unintended consequences," such as the repercussions that arose over proposed stricter regulation of secondhand dealers.

When asked for the length of stay, Fix said it would require more research, but offered that 30 days right now seems like the standard length.

While no decision was made, the county has to renew the Local Law before the end of September, likely extending it for three more years. It can add language to include Airbnb and similar companies to coincide with the renewal or it can wait until any time after Sept. 30.

Previously: County discussion focuses on local law pertaining to 'bed tax' status of Airbnb-type rental units