Legislator Sponsors Beacon Hotel Tax

Would allow city to collect 5 percent on rooms, Airbnb

State Assembly Member Jonathan Jacobson, a Democrat whose district includes Beacon, has introduced a bill that, if approved by the Legislature, would allow the city to collect a tax of up to 5 percent on lodging stays.

While Beacon does not have any traditional hotels or motels, the tax would apply to bed-and-breakfasts and short-term rentals made through platforms such as Airbnb, as well as rooms rented at the Roundhouse, which, according to its website, range from $249 to $549 per night.

The city’s charge would be in addition to a 4 percent tax collected by Dutchess County from hotels, motels and, since 2017, Airbnb, which in 2022 sent the county $785,502.

An occupancy tax would also apply to the 85 rooms at the Mirbeau Inn & Spa, which is expected to open in 2025 at the Tioronda Estate on Route 9D. The company charges more than $400 per night at its Rhinebeck hotel.

A development group has also proposed converting the former Reformed Church of Beacon into an event space with restaurant and 30-room hotel; the project is still being reviewed by the Planning Board.

Jacobson introduced the bill, as well as another that would allow a hotel tax in Poughkeepsie, in the Assembly earlier this month. A memo attached to the bill said it would generate added revenue, “which will be used to reduce the burden on local taxpayers.” If approved, the tax would take effect immediately and expire after three years.

The bill was referred on April 18 to the Assembly’s Ways and Means Committee.

Two things must happen before the Legislature can consider Jacobson’s bill. A similar bill, expected to be submitted by Rob Rolison, a Republican whose district includes Beacon, must be introduced in the state Senate.

The Beacon City Council would then have to pass a “home rule” resolution asking the Legislature to act on the bills. If approved, 100 percent of the new tax revenue would go to the municipality.

Once those steps are in place, Jacobson said on Tuesday (April 25), he believes the Legislature will vote quickly on the measure.

Jacobson said he speaks periodically with Beacon Mayor Lee Kyriacou and during a recent conversation asked the mayor if hotel-tax legislation would interest city officials.

Room-tax bills sponsored by Jacobson for the city and town of Newburgh were passed by the Legislature in the last two years, and legislation introduced by then-Assembly Member Sandy Galef and Sen. James Skoufis to allow Cold Spring to collect up to 5 percent on hotel and short-term rental stays was enacted by the governor in July. During their most recent meeting, in March, members of the Putnam Legislature’s Economic Development and Energy Committee discussed a room tax for the county, although no action was taken.

Beacon will be “happy, not only for the revenue, but it will give [the city] a chance to control Airbnbs, which many people have been complaining about,” Jacobson said.

Kyriacou on Wednesday estimated that the tax could add funds equivalent to 1 percent of the city’s property tax levy, and “would grow as more hotel space is built, which is a modest but nice addition to Beacon revenue sources.” (The city’s tax levy in 2023 is $12.5 million; 1 percent of that would be $125,000.)

There are about 110 short-term rentals in Beacon, the bulk of them illegal because they have not been licensed by the city. Graham Lawlor, an organizer of the group Beacon Hosts, said he is in favor of a Beacon hotel tax “in principle,” but feels Jacobson’s proposal will be excessive when combined with Dutchess County’s charges.

“When taxes are too high it encourages people to circumvent the law and raises enforcement costs,” Lawlor said. “You can see this in states that legalized marijuana but set unrealistic tax rates — the black market continues to thrive. A reasonable short-term rental tax that goes directly to the City of Beacon to help build parks and schools and programs for Beacon residents would be perfect.”

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