Bed, Breakfast, and a Lodging Tax

It's no secret that the Common Council is looking for new sources of revenue to keep the City solvent and functioning and to give residents some relief from the increasingly heavy burden of property taxes. One of the favorite ideas, first suggested in a public meeting by Alderman John Friedman (Third Ward) back in September, is a lodging tax--a 2 to 8 percent tax applied to room rates at hotels and B&Bs in Hudson. When the idea was first presented, Friedman said a part of the revenue from the tax would be "plowed back into the industry that created it" in the form of a "cohesive marketing program for the city."

Mayor William Hallenbeck questioned the wisdom of the proposal, maintaining that it would discourage tourism. In a press release, Hallenbeck announced his intention to "arrange a meeting with the owners/operators of our city-wide B&Bs." He explained the goal of the meeting in this way: "First, it will help me identify further who they are and who runs them, and secondly and most importantly get their advice on this and any other issue that they have concerns about pertaining to the B&B business." So far, there has been no word that such a meeting has occurred.

B&B proprietors Gossips has spoken with have expressed concern about the possible inequity of the tax. If the tax is only levied on rooms in recognized hotels and B&Bs, the increase in price from the tax could drive patrons to the guest rooms and houses marketed on Airbnb, which might offer lower prices because they are not collecting the lodging tax. 

There are many such accommodations available in Hudson. A search for the destination "Hudson, NY" on Airbnb yields 891 rentals. Not all of them are actually in Hudson. In fact, fewer than a hundred of them are. The others are located elsewhere in Columbia County and the Hudson Valley, as well as across the river in Athens and Catskill and across the border in Massachusetts. Browsing the list though reveals that there are tourist accommodations in homes and buildings where you wouldn't necessarily imagine them to be.

Even though the mayor and some hotel and B&B owners have reservations (no pun intended) about a lodging tax, Alderman Tiffany Garriga (Second Ward) has taken on the task of researching the experience of five cities in New York that have lodging taxes: Niagara Falls, Peekskill, Rye, Lockport, and Geneva. To gather information, she is posing nine questions:

1. What year was your tax first initiated?
2. What is the current percentage rate? Is that the original rate or has it been raised?
3. How much revenue is raised annually from the tax?
4. How many beds do you currently have subject to the tax?
5. What was the purpose of the tax as first proposed--to raise funds generally or to raise funds for a specific purpose, for example, for the promotion of tourism? 
6. Is the revenue now collected added to the general fund or is money reserved in separate accounts for the promotion of tourism or other purposes?
7. Has the implementation of the tax offset property taxes either by reducing the need to raise taxes or by increased revenue from tourism?
8. If money is reserved for tourism, has it been successful in terms of increasing activity and revenue from tourists?
9. Is the municipality satisfied with the tax as it is, or do you feel it needs adjustment for improvement--for example, does the rate need to be increased, or should the application of funds raised from the tax be redirected?

So far, Garriga has received information from two of the five cities. In Niagara Falls, a 4 percent lodging tax was initiated in 1991. In 2006, it was increased 1 percent to finance a trolley to transport tourists to hotels and B&Bs. In Peekskill, where there is only a Holiday Inn Express with 76 rooms, a 3 percent lodging tax was introduced in 2013. So far in 2014, the revenue from the lodging is $64,000, which has not helped to offset any general taxes.
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