KINGSTON, NY — A plan to change how the county occupancy tax is collected on all-inclusive resorts was rejected Tuesday by county lawmakers, who said increasing county tax exemptions would hurt the county’s efforts to fund housing and transportation initiatives.
The measure would have amended the county’s lodging tax law to allow establishments that offer meals and five or more “non-passive” activities as part of the room rate to exempt up to 80% of the room rate from the county’s newly implemented 4% lodging tax. Currently, all-inclusive resorts pay a lodging tax on 40% of the room rate.
The 13-6 vote to reject the proposal was along party lines, after Assemblywoman Kathy Nolan unsuccessfully attempted to send the proposal back to committee for further consideration and three residents urged assemblymen to reject the proposal, saying it would hurt the county’s efforts to increase funding for housing and transportation projects.
Nolan, a Democrat from Shandaken, headed a special working group that recommended expanding the exemption.
But supporters of the bill said it would be unfair to all-inclusive resorts that offer more than just overnight accommodations to impose the tax on the entire room rate.
In January, County Executive Jen Metzger signed legislation doubling the county’s occupancy tax from the current 2% to 4%. The new tax took effect in February and will be levied on all short-term rentals in the county.
The 2024 budget projects $6.3 million in revenue from the tax increase, more than double the $3,055,832 the county collected in 2023 from the tax, which is levied on all hotels, motels and short-term rentals. Metzger said 25% of the revenue from the 4% tax would go to the county’s Housing Action Fund, 25% would go to the county’s UCAT bus system and 10% would go to tourism-related efforts.
Rochester resident Steve Bush called it “unthinkable” to raise the exemption limit and said a flat rate of just 20 percent of the total room rate would “put an end to our affordable housing projects.”
Lawmaker Joseph Maloney said that unlike traditional hotels, which simply offer a place to sleep, maybe breakfast and a pool, the all-inclusive resorts offer a wealth of other amenities such as horseback riding, skiing and amusement parks.
“They’re going to be taxed on all of these things,” said Maloney, Democrat of Saugerties, warning that the increased tax – which will be passed on to guests – could ultimately drive the resorts out of business.
“For years, these people have been paying taxes on horseback riding and skiing that these other facilities have not paid,” agreed Republican Rep. Herbert Litts of Lloyd.
Nolan said applying the tax to the entire price of these all-inclusive resorts means “risking killing the goose that lays the golden eggs,” especially given that the county has lost four of the six all-inclusive resorts that once drew tourists to the county.
Editor’s note: This story has been edited throughout to clarify proposed rates.
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