Hotel/Motel Tax Hike Passed By County

Posted on 18 September 2009

On Thursday, the Suffolk County Legislature voted through legislation that will increase the county hotel/motel tax from .75 percent to three percent. The law is expected to go into effect as early as December, much to the outrage of local lawmakers and hotel owners.

“There was zero input from people in our industry … There was no outreach,” argued Nathiel Egosi, owner of the Sag Harbor Inn. “This is going to have an adverse impact on our business. People are on a tight budget and they will now see that it is less affordable [to stay on the East End]. Some people think charging three percent more isn’t a lot, but how about cutting a salary by three percent?”

Suffolk County Legislature Presiding Officer William Lindsay maintains that the money will help the county recoup some of the $100 million increase from the MTA payroll tax.

“Nearly all of these outrageous taxes we pay to the MTA go to support services for New York City residents,” said Lindsay. “This increase in the hotel/motel tax is going to have almost no impact on Suffolk County residents but it will recoup from visitors from New York City some small percentage of the hundreds of millions of dollars we pay every year to support New York City’s buses, subways, bridges and tunnels.”

Egosi argues that many of his guests hail from Long Island and Europe, not New York City. Further taxing businesses that already pay the increased MTA tax, added Egosi, will stymie economic growth.

County Legislator Jay Schneiderman also disagrees with Lindsay and fought to table the resolution on Thursday. But without the backing of fellow lawmakers, the bill was passed 13 to five.

“Many representatives of the hotel industry are representing that their revenues were down between 20 to 30 percent over last year,” contended Schneiderman during the legislative session on Thursday. “You may have convinced yourself that this tax won’t deter business, you are wrong. Anything that makes it more expensive to stay in an area will — over time — drive visitors to other tourist destinations that are more affordable.”

“My district contains more than half of the total number of hotels in Suffolk County,” added Schneiderman. “This hotel tax was put together without consulting the industry. The tax is estimated to collect an additional $5 million in tax revenues. Around $2 million goes to help the county budget. Of the remaining $3 million, around $700,000 will go to operate the Vanderbilt Museum. Another $100,000 to the Walt Whitman Museum birth place. It is interesting that this bill which purports to help tourism contains two earmarks in the Huntington area where only four percent of the county’s hotels are located and none for anywhere else — including the South Fork.”

According to Lindsay, the hotel/motel tax generated $1,905,406 in 2008, at a rate of .75 percent, but is expected to garner $1,653,892 in 2009. But with hotel/motel tax rate increasing to 3 percent next year, adds Lindsay, it is estimated that it would yield nearly $7 million dollars. The resolution further explains that the tax will be tacked onto daily rental rates per room.

Schneiderman contends that the increased tax will depress both tourism on the East End and sales tax revenue. A comprehensive study of the ramifications of increasing the hotel/motel tax, argued Egosi, wasn’t conducted. Egosi didn’t find out about the tax until a week before it was voted through the legislature.

“There was no input [from hotel owners] about how to better allocate that money,” contended Egosi. “[The tax] could have been good for business, if businesses were consulted about where more money should be spent to promote and encourage tourism [in the county].”

“I pleaded on the floor to wait one month to get the input of people in the industry,” added Schneiderman.

In the resolution, it is written that the tax money will be re-circulated to venues of tourism, with 24 percent of revenues to be given to the agency that promotes Suffolk County tourism. However, a large percentage of the collected funds are earmarked for the county parks and recreation department. Remaining revenue will be deposited to the general fund. According to the legislation, the hotel/motel tax will be in effect through 2015. Suffolk County Executive Steve Levy still has to sign the bill into law.

“We are getting taxed to death,” remarked Schneiderman. “Or at least taxed out of business.”

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2 Responses to “Hotel/Motel Tax Hike Passed By County”

  1. tom says:

    THanks Suffolk county just pull another lung from us! We cant survive on long island . Taxes up the ass here. We will have to all eventually move out to another stae thanks to the county not being able to count. Thanks for stealing our money ! Thanks for the currupt govt that runs the Unioted States. Thanks for Electing obama as our president. I can see that the usa is in deep trouble. The illuminati (new world order is takeing effect Now ! This is what the changes he has planned. we are all like lab rats. test to see how much we can take !!! No wonder the pharmacutical companies are pumping out pills the govt is causing everyone to take anti deppressin meds anti anxiety meds. This did not happen 40 years ago. life is now more disatreous. Thanks for trating us like cattle!

  2. Guy says:

    As a motel owner for 30 years in Patchogue I find it amazing that the legislators that passed this TAX could be so clueless and misinformed about the hotel/motel industry, along with most other issues. They’ve screwed things up so bad over the last 20 years, Republicans and Democrats alike. Now its time for the “tourists” aka “Long Islanders” to pay for the recovery. These so-called tourists are none other than the people who live here. Reality sucks, but 90-95% of our business comes from local people, Some who have lost their homes or apartments, some who can’t afford to come up with security to pay for an apartment, and others who are living day to day, making enough just to pay for a room to stay off the street. “News flash” people from out of town already don’t want to pay the ridiculously low rates we are forced to charge due to the economy. What little tourism left, thanks to these idiots that run the local government, has diminished greatly over the past two years. Another nail in the coffin, we as a struggling small business, will now have to pass on another tax to the Long Islander’s who are also struggling and desperate and at the same time, give legitimate tourists another reason to go elsewhere. Its time for a revolution, we need to rid these overpaid, out of touch, politically challenged, and last but not least morons of their positions. It is coming, sooner that you think.

    Yes, it was time for a change from the Bush Clinton Bush era, but this is not what anyone bargained for. Obama’s communistic, socialistic methods will only take this once great country to its ultimate downfall.

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