Editor’s Notebook: Why No Room Tax?

Putnam has no hotels, but hundreds of rooms

By Chip Rowe

If someone offered to pay your taxes, would you take them up on it?

Of course you would! That’s what makes it so odd that Putnam County collected $218,000 in taxes last year from its residents that could have been paid by people who don’t live in the county but take all the parking spots.

The reason? Unlike Dutchess and at least 27 other counties in New York, Putnam does not have a room tax. That’s the 2 percent to 6 percent charge that gets tacked on the bill when you stay at a hotel, bed-and-breakfast, Airbnb or other overnight lodging. When the bottle of water in your room is 5 bucks, you may hardly notice. If you are traveling on business, you especially don’t notice.

Towns and villages can’t create these taxes; the county has to do it, and the state has to give the OK. In 2012, the Putnam Legislature passed a 4 percent tax but newly elected County Executive MaryEllen Odell vetoed it. She argued that the tax would inhibit “future economic development projects such as a hotel, motel or conference center.”

I asked Odell if the subsequent growth of short-term private rentals had changed her mind; she said no.

“I vetoed the resolution because at the time I thought it was ridiculous to tax something that didn’t exist,” she said. She and everyone else were waiting — and are still waiting — for a 57-room hotel to open in Southeast that has been under construction since 2009. Odell said she can foresee the Legislature discussing a room tax once that happens.

By contrast, she argued that Airbnb is a town and village issue, and any taxes generated should be levied and collected locally. She shared a National Public Radio story about a company called Compliance that acts as a “digital sheriff” for 300 cities and counties to ensure hosts are following local laws. In Nashville, the result has been a 50 percent increase in the permit fees it collects from hosts.

Sam Oliverio, who was a member of the Legislature in 2012 and is now the Putnam Valley supervisor, voted against the room tax and said he would do so again. His view is that taxing Airbnb rentals legitimizes them.

“By doing a hotel tax, we are essentially saying, ‘Come on board, everyone, with your rentals and thus deprive hard-working families a potential home,’ ” he said. “We don’t need transient rentals in Putnam. We need stable families living in houses that are a home, not a money-making structure for some rich fat cat from the city.”

Of course, both Odell and Oliverio are ignoring the hard truth that Airbnb is already here, with nearly 10,000 bookings in Putnam annually. Even without hotels, visitors dropped $5.45 million on lodging in the county in 2018, according to a report by Tourism Economics. Airbnb says it recorded $1.7 million in bookings in Putnam, which would account for nearly a third of the revenue.

In early 2017, Dutchess got smart and told Airbnb to begin collecting its 4 percent room tax. The site has since sent Dutchess more than $600,000.

In that same period, Putnam received a check for … zero. If the Tourism Economics numbers are on the money, the county missed out on enough revenue to fund, say, a tourism department. Instead, the taxpayers of Putnam will do it.

If Putnam were to instead distribute the revenue to its towns and villages, Airbnb could certainly provide a geographical breakdown of bookings to divvy it up. Small-town officials such as those in Cold Spring will be challenged identifying private rentals, let alone enforcing the rules and collecting fees. Airbnb, at least, knows where they are, and no one gets a room unless they pay.