County discussion focuses on local law pertaining to 'bed tax' status of Airbnb-type rental units
At the suggestion of the Genesee County Chamber of Commerce’s tourism staff and Airbnb officials, County Attorney Kevin Earl and Manager Matt Landers today led a discussion about changing a local law to impose a “bed tax” on residents who rent out their homes on a limited basis.
Speaking at the legislature’s Ways & Means Committee meeting, Earl said he is communicating with representatives of Airbnb, the popular vacation rental online company that helps (for a commission) homeowners arrange lodging for tourists.
His proposal, if supported by the legislature, would generate additional income for the Chamber to run its tourism operations.
“First of all, the Airbnb proposed agreement applies to occupancy taxes – bed taxes as we call them … and the second thing is the important discussion we have to have (because as of now) our law has an exemption for under six units,” Earl advised.
The attorney said a house being rented out for travelers would be considered as one unit.
“So, we would have to have the consent to go ahead and change that to allow the law to apply for under six units,” he said. “Number three is a corollary of that, if we do that, we want to make sure that if somebody rents their house or apartment for a couple days, a couple weekends or one week, that they don’t have to go through all of the process (of) collecting and enumerating bed tax to the county.”
Less Than Six Units, More Than 10 Nights
He then suggested 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.
By modifying existing law, the 3 percent bed tax currently in place for motels and hotels would also be charged to the rental units (homes, apartments and even the small structures at campgrounds).
The hotel adds this charge to the customer’s bill (which also includes an 8 percent sales tax) and remits this occupancy tax payment on a quarterly basis to County Treasurer Scott German, who then appropriates it to the Chamber for tourism purposes.
A nickel of each dollar generated is kept by the county as an administration fee and the remaining 95 cents goes to the Chamber..
Landers said the proposal “has been expressed to us as a matter of fairness because this is something that would even the playing field. Hoteliers have to pay this and (there are) people who are utilizing Airbnb services throughout our county.”
He also mentioned that he did a “quick search” a couple summers ago and found that there were 28 of the Airbnb-variety units in the county, giving him reason to believe a change in the law would be warranted.
“If there was one or two, maybe it wouldn’t be worthwhile but there is enough out there and something that our Chamber of Commerce has expressed interest in exploring,” he said.
He reported that Airbnb has similar contracts with other New York counties.
Landers: Looking for a Consensus
“Kevin and I didn’t want to go through the process of making all these changes – it’s a policy change – if the legislature didn’t have the desire to go forward with these changes,” Landers said. “We can come back again in the future with actual recommended changes of the local law and go to a public hearing … if there is a consensus.”
Legislator Gary Maha asked Landers if he has an estimate of the amount of revenue that would be realized by such a change. The county manager said he did not, referring back to the 28 units he identified a couple years ago but didn’t have a breakdown of the dollars received.
“It’s nothing that would come to the county … the lion’s share goes directly to the chamber,” he said. “This is an area I think will only grow in the future. Airbnb is getting more households and is easier to deal with, and revenue is probably going to be growing. I can’t tell you an estimate of how big it is right now, but if I had to place a guess, it’s only going to go up.”
Legislature Chair Rochelle Stein asked if the modified local law would have an effect on campsites “where folks have those little houses that folks can rent.”
“If they rent those through Airbnb at a campground will that be impacted? And are campgrounds that have those little chalets, I’ll call them tiny houses, are they already paying a bed tax and a sales tax?”
German responded affirmatively, noting that Darien Lake’s campground has “several of those little huts and they are being taxed at 3 percent.”
Law Would Target Booking Companies
Earl said wording of a new law would have general language that would define Airbnb as well as businesses such as Flipkey, HomeAway and VRBO as booking companies.
“So, this will apply to any that are now known or any in the future. We will make the definition broad enough so that if XYZ company comes in as a booking agent – and even realtors (who) could possibly book houses,” he said.
Committee Chair Marianne Clattenburg asked if the new law was implemented, would the Chamber help promote those individuals and companies offering homes for rent by including them in a list available to the general public. Landers said he would expect that to be the case and would share her view with the Chamber staff.
Still, at first sight, she sees the proposal as “more regulation” and said she needs more information before supporting it.
Legislator Christian Yunker asked who is responsible for keeping track of the number of nights and the revenue -- Airbnb or the homeowner?
Landers said that while Airbnb captures the money and remits the funds to the county, individual owners would have to provide a report to the treasurer’s office for reconciliation purposes. Hotels and campgrounds also are subject to that requirement, he added.
Klotzbach contended that Airbnb should be responsible for reporting, but Landers and Earl said the company just wants to pass the money along and is not in favor of a process where individual homeowners’ identities are disclosed.
There's a Cost of Doing Business
At that point, Landers shifted the debate by offering to change the time period.
“Instead of 10 days, if we really want to capture people that do this a lot, then it could be over 30 days or over 60 days,” he said. “I guess at that point you should know if you’re renting a place out for that many days in a row that’s a cost of doing business versus maybe two weeks out of the year, you rent the place out or you’ve got a room that you’re renting out and it’s something you don’t think about.”
He said the county doesn’t seek to be “overly regulatory” but acknowledged the request from the tourism agency “that was hit particularly hard during COVID as a way to capture revenue from people outside of our area to assist with tourism.”
Legislator John Deleo said he didn’t have a problem with someone trying to make some extra money to “keep the water level below their nose” but agreed with Clattenburg that more information is needed before deciding.
Earl said there is no time limit, but is ready to move forward when the legislature approves. Clattenburg then asked Landers and Earl to provide further details while Ways & Means does its own research.