Delaware County's board of supervisors is set to introduce legislation to impose a two-percent hotel occupancy tax.
At a public information meeting held on Monday, Oct. 5 in Delhi, Delaware County Economic Development Director Glenn Nealis said that the proposed local law will be introduced at the Oct. 14 meeting of the supervisors and that a public hearing would likely be scheduled for Oct. 28, prior to another board meeting.
At the meeting on Monday, Nealis and town of Stamford Supervisor Michael Triolo, who chairs the board's economic development committee, fielded questions and comments from about a dozen people who attended.
Nealis explained that county leaders are contemplating the “bed tax” as a means to fund tourism promotion. He explained that Delaware County currently spends $95,000 per year on such promotion, while “some of our neighbors are spending $800,000 to $950,000.”
He cited sales tax figures from 2012--the most recent year for which figures are available--which showed that $9.7 million was spent on lodging in Delaware County that year. Based on those sales, the county could expect to receive $192,000 in bed tax revenue.
“At least it's a little more that would support tourism in Delaware County,” Nealis said.
Nealis said that both state law and the proposed local law would require that all of the revenue from the tax be used to promote tourism. He said that that is different from the situation in Otsego County, which adopted a bed tax before changes to the state law. He said Otsego receives $1.5 million in bed tax revenue, but uses only $400,000 for tourism promotion. The rest goes to the county's general fund.
The Delaware County Chamber of Commerce is the county's designated tourism promotion agency. It receives the $95,000 allotment from the county and uses it, in part, to gain matching state funds through the “I Love New York” program.
Nealis said that the chamber would not automatically receive all of the bed tax revenue, though it could apply for funding for specific initiatives. Decisions on the use of bed tax money would be made by a board comprised of the economic development director, two members of the board of supervisors and four representatives of tourism-related businesses, he said. At least two of those representatives would be from lodging businesses.
The county treasurer's office would be authorized to retain up to 10 percent of the revenue collected to offset costs of administration, he said.
Nealis said there would also be a five-percent credit issued to businesses which remit the tax, “giving back something for them going through the effort of having to administer the tax.”
Above: Liz Callahan, the executive director of the Hanford Mills Museum, listens as new Delaware County Chamber of Commerce President Ray Pucci speaks at a meeting about a proposed hotel occupancy tax on Monday in Delhi.
Those in attendance, mostly proprietors of lodging establishments, offered differing opinions on the tax.
Leland Ploutz, who owns the Octagon Motel in Walton, opposed the tax.
“Don't compare us to Otsego County,” he said. He noted that Otsego has the National Baseball Hall of Fame and other museums, as well as a large shopping area in Oneonta.
“They've got a lot to offer. We're not that kind of county,” he said. He said the Delaware County Fair, staged for one week in August, is the county's only major attraction.
Ploutz said that the focus should be on fixing roads instead. “You're not going to get people in here when they have to come on a buckboard,” he said. He also complained about state regulations, such as water testing requirements, that affect lodging businesses.
Skip Parcell, owner of the Delaware House Inn in Andes, asked what the return would be on the investment of bed tax dollars. Nealis replied that the return would not be known until the investment was made, though he offered to gather figures on the impact of money spent on tourism in recent years.
Parcell said that a plan should be in place for spending the money before the tax is approved.
“What you're saying is, we should give you that money without that expectation,” he said.
Kathy Sullivan, owner of the Inn at Toll Gate Creek in Delhi, noted that many people rent rooms or homes through websites like Airbnb and do not pay sales tax. She said those businesses would not pay bed tax, either, though they would benefit from the promotion funded by the tax.
Her husband, Kevin, agreed. “We're promoting their underground business,” he said.
Nealis replied that he expects the state legislature to make changes to the law so that such rooming operations are taxed. He said he would have “no problem” advocating for stricter controls on such establishments.
Triolo agreed. “We really want everybody who's in business to follow the same rules,” he said.
Roxanne Liddle, owner of the Fisk House bed and breakfast in Delhi, said she was not opposed to a bed tax, but said that something should be done to address the disparity in costs between registered lodging businesses and the Airbnb establishments.
“I feel like there's a shortcoming if there are people renting their homes, their second homes, and they're not paying the same taxes and insurance,” she said. Nealis said that Airbnb-registered sites pay taxes in other states, and that he was not sure why they are not taxed in New York.
Liddle said that she doubted visitors would even notice a two-percent tax and said that, during a recent trip to Texas, she paid 18.75 percent in combined sales and bed taxes for a hotel stay.
Ed Rossley of Bovina, who rents a house through Airbnb, said that ethical owners do pay taxes. He said that Airbnb issues a federal 1099 tax form to owners each year, and that he pays sales tax based on that form.
“You are liable for your eight percent tax,” he said.
In response to a question, Triolo said that bed tax money would not be used to promote individual businesses, but might be used to promote events. “The idea is to get people here,” he said.
Gary Simmons, owner of the Mountain Brook Inn in Bovina, opposed the tax. He said that previous tourism plans for the county were “sort of fabricated” and said that he wants to see a “prototype” of a plan for the bed tax revenue.
Liz Callahan, the executive director of the Hanford Mills Museum in East Meredith, says that she has served on the county chamber's tourism committee for 20 years and that the goal of promotion has always been to get “heads in beds” because people who stay in the area spend money at many other businesses.
She said that Delaware County has a disadvantage in comparison to other counties in the Catskills because those counties have bigger budgets and better access to major highways.
“We have a very special place here. We need to promote it,” she said. She also said that tourists don't pay a lot of attention to what county they're in.
“They don't know they're crossing county lines. They just want to do something,” Callahan said.
Callahan said that the bed tax “is pretty much going to happen,” and that the county should make the best use of it. She said that neighboring counties have “six or seven” people working on tourism full-time, while Delaware County has none.
Nealis replied that the tax is not a forgone conclusion, and that there are supervisors both in favor and opposed.
Georgia Murphy of Andes said that she supports the tax. She said that the added funding will allow the county to create materials such a travel guide that can be distributed at rest stops on the New York State Thruway. She said that she had worked in tourism promotion in the Hudson Valley and had seen such publications used with great success.
Ray Pucci, who was recently appointed as the president of the Delaware County Chamber of Commerce, said that state tourism officials have asked county tourism promotion agencies to identify tourism-related businesses for inclusion in publications.
“We take the responsibility of being the tourism promotion agency very seriously,” he said. He said that a mailing seeking information on local businesses recently went out to all businesses, not just chamber members.
Ploutz reiterated his opposition to the tax. “It doesn't sit right with me,” he said. He complained about tourists already in the county. “The leaf-peepers are causing problems with the traffic,” he said.
Rossley, who is also the president of the Delaware Valley Agricultural Society, which organizes the Delaware County Fair, said that the county needs more tourism infrastructure. He said that the fair likes to promote Delaware County, but had to use an Oneonta hotel when hosting a statewide conference because no suitable facility was available in Delaware County.
Several in attendance said that the lack of cellular telephone service in the county hampers efforts to lure tourists as well.
Triolo said that the larger purpose of the bed tax is to draw more people into the county and increase sales tax revenue on other purchases to offset property tax increases.
“I support it because taxes in the county are going to continue to go up,” Nealis said. “The bed tax is not a perfect tax. We know that. But if we can get somebody in your rooms, you're going to make money.”
Two more informational meetings about the proposed Delaware County bed tax are scheduled. One will take place on Wednesday, Oct. 7 at 6 p.m. at the Middletown Town Hall in Margaretville and the other will take place on Monday, Oct. 12 at 6 p.m. at th5e Hancock Town Hall.
State legislators approve Delaware County's bed tax, June 25, 2015
Delaware County's proposed bed tax rises again, April 23, 2015
Delaware County votes to move forward on bed tax, April 24, 2014