Town seeks to tax room rentals

Town seeks to tax room rentals
Photo by Kostiantyn Li / Unsplash

After many years of discussion, the town of Putnam Valley is taking the first step towards regulating Airbnb and Vrbo rentals.

At a work session on April 12th, the town board voted unanimously in favor of a resolution that asks the state legislature to allow the town to impose a 4% tax on all rooms for rent. Though the resolution makes no specific mention of Airbnb or Vrbo rentals, in her opening remarks Supervisor Jacqueline Annabi made it clear they are the primary target. "This board has talked about the possibility of regulating Airbnb or short-term rentals. Part of the procedure of regulating them is to try and get a bedroom or occupancy tax that the town would be able to earn," she said.

The resolution cites the significant increase in homes being used for short-term rentals, as well as the need to protect our lakes and sources of drinking water. The town intends to use the revenue generated by this tax to improve the public water and sewer infrastructure that would facilitate future development opportunities. Supervisor Annabi indicated that this is just the first step in what she hopes will be further efforts to regulate this growing industry: "It’s a great beginning to where we need to be," she said.

The proposed 4% room occupancy tax is in line with others imposed by nearby towns. Last year, for instance, the village of Cold Spring received approval from Albany for its request to impose a tax of up to 5% on short-term room rentals and indicated that the revenue would be used to support the administrative costs to the town of the accompanying permitting, inspection and enforcement requirements.

The Putnam Valley room occupancy tax would be imposed on visitors who are renting rooms, but the hosts would need to collect the tax and transmit it to the town clerk. Supervisor Annabi did not have an estimate for how much revenue might be generated because the town currently has no way of knowing how many home owners are renting out rooms or what they are charging.

If the state legislature passes legislation supporting this "home rule" request and the governor signs off on it, the town board will hold a public hearing on the proposal. That will allow for a more extensive airing of an issue that has often proved divisive, pitting those who want to curtail the noise and disruption that can accompany an influx of visitors against those who want to put their homes to work financially and may not appreciate the administrative burden this will impose or the higher prices they may now feel compelled to charge.

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