The proposed bed tax expansion, to include private rentals, in Essex County needs a closer look than has been disclosed so far. It may have some potential legal issues.

First let’s understand what the bed tax expansion is mostly all about.

1. Hotel and motel owners want to increase the cost to renters of renting private residences to make the rentals less competitive as compared to their facilities.

2. The county and towns throughout the state are severally limited by Albany on how much they can raise property taxes, so they are looking for additional sources of revenue. It seems that the increased revenue will be shared with the towns. While it is stated that the money from this tax increase will go to promote tourism, make no mistake that it will be used to relieve budgetary pressures in Essex County and all the towns in the county. If enacted, it will be interesting to see what each of the towns consider to be “promoting tourism” and how much the county and the organizations they support with these funds uses any of this money to promote private home rentals in the same manner as they assist in promoting hotels and motels.

On the legal side, there are some interesting issues. Essex County can only collect a bed tax because the New York State Legislature previously passed enabling legislation. That state legislation, in defining who is to be taxed, says, “For the purposes of this section, the term ‘hotel’ or ‘motel’ shall mean and include any facility providing lodging on an overnight basis and shall include those facilities designated and commonly known as ‘bed and breakfast’ and ‘tourist’ facilities.”

The Essex County attorney had previously concluded that the county could not charge the tax on private rentals. Recently he changed his mind, without apparently citing any legal opinion other than his own, and said that the county could charge private rentals concluding that such rentals meet the criteria. His interpretation seems to have the most conflict in regard to private residences that rent by the week or longer. How are such rentals considered to be “on an overnight basis” and/or “commonly known as ‘bed and breakfast’ and ‘tourist’ facilities”? Further, New York state Sen. Betty Little, who is the sponsor of the enabling state legislation, in an email to me in June stated, “Private homes that rent by the week would not be subject to this tax.”

It certainly seems possible that private homeowners who rent their homes, and whom Essex County considers subject to this tax, will take legal action against Essex County, either individually or collectively. It is my understanding that when courts interpret legislation, they put heavy weight on the intent of the legislature. Considering Sen. Little’s comment, the intent seems clear.

Dick Gunthert

Saranac Lake