A local law to create a hotel and motel occupancy tax came a step closer to reality on Wednesday, Oct. 14, when the Delaware County Board of Supervisors scheduled a public hearing on the law to add two percent to the bills for overnight stays.
Wednesday's introduction of the law does not put it into effect. A vote on establishing the tax will likely follow the public hearing, which is scheduled for Oct. 28 at 12:35 p.m., prior to the board's meeting. The hearing and the meeting will take place in the board room at the county office building at 111 Main Street in Delhi.
It seemed, briefly, that the introduction of the law would be delayed.
Davenport Supervisor Dennis Valente questioned a provision of the law that would allow the county treasurer to require businesses to post a bond for the amount of the tax.
Economic Development Director Glenn Nealis explained that the provision would give the county recourse to collect the tax from businesses that “consistently” fail to remit it.
“It's just a tool to make sure they’re paying on a more timely basis,” Nealis said.
Valente asked if bonding is a practice used to collect other taxes.
“We don't do that. We just foreclose,” said County Treasurer Beverly Shields.
Valente moved to remove the bonding provision from the law.
During discussion on Valente's motion, Stamford Supervisor Mike Triolo explained that most large hotels have both a “real estate entity” and an “operating entity.” Because the operating entity is responsible for remitting taxes, foreclosure against the real estate entity is not effective, he said.
“You really need this to enforce it,” said Board Chairman and Harpersfield Supervisor James Eisel.
“No, you can put them in jail,” said Valente.
“The jail's full,” replied Eisel.
After whispering with County Attorney Porter Kirkwood, Eisel seemed ready to withdraw the resolution despite the open motions on the floor.
“Counsel tells me that we can send it back to committee, so that's what I'll do,” he said.
Several supervisors objected to tabling the matter, and Eisel called for a vote on the motion to remove the bond provision.
The motion was defeated by a large margin of weighted votes, though Valente, Triolo, Andes Supervisor Martin Donnelly, Colchester Supervisor Art Merrill, Deposit Supervisor Tom Axtell, Hancock Supervisor Sam Rowe, Roxbury Supervisor Tom Hynes and Tompkins Supervisor Bill Layton voted in favor.
The vote to schedule the public hearing followed and the resolution was approved, with Merrill, Valente and Axtell opposed.
Before the vote, Nealis reported on a series of informational meetings held in advance of the introduction of the law. He said that 35 people attended the three meetings—held in Delhi, Middletown and Hancock—and that opinions on the law were split “approximately 50-50.” He said that 21 of the attendees were owners of lodging businesses and that one owner attended all three meetings to express his displeasure with the proposal.
Nealis said, however, that opposition had softened as people learned more about the proposal.
“Some of them either had their opposition lessened or were not against it anymore,” he said. Nealis told the board that some owners felt it was unfair that they would bear the burden of collecting a tax that would benefit other businesses, and that “a minority” felt the two-percent increase would make their prices too high to be attractive to visitors.
In response to a question, Nealis said that he has a list of 102 lodging businesses in the county, but that he did not believe the list was complete. He estimated that the tax would raise about $192,000 in revenue, based on 2012 sales tax receipts.
According to the text of the proposed law, proceeds from the tax will be "paid into the treasury of the County and shall be credited and deposited into a special tourism development and promotion fund under the trust and care of the Treasurer." A tourism advisory committee will allocate the funds.
Nealis and Triolo, among others, have argued that the county needs the funds to compete with other area counties that have much larger tourism budgets than the $95,000 the county allocates to its tourism promotion agency, the Delaware County Chamber of Commerce.
Below: The text of the proposed bed tax law that was considered by the Delaware County Board of Supervisors on Oct. 14.
LOCAL LAW INTRO. NO. 12 OF 2015 LOCAL LAW IMPOSING A HOTEL/MOTEL OCCUPANCY TAX IN THE COUNTY OF DELAWARE
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