Imagine what $10 million could mean in terms of public services and programs in New York City. According to a recent Businessweek article, the city’s hotel tax revenue is projected to drop three percent in 2012, equivalent to $10 million.
A state law that went into effect in 2011 making it illegal for Class A buildings to have paying guests for less than 30 consecutive days in New York City undoubtedly has had a major effect on this three percent decline from the $363 million hotel room occupancy tax revenues from 2011.
Granted, the small group of bed & breakfast operators that compose StayNYC don’t account for a big chunk of this $10 million difference, but we are happy to pay our fair share as tax compliant small facility operators. As the unintended targets of this law, our businesses are suffering, and the city’s tax revenues are as well.
As we’ve said before, Fall in New York City is our busiest time of year. Our members estimate that 3,850 guest nights will go unused over the last four months of 2012 and this will cost our businesses over $1.1 million. At a 5.875 percent hotel tax rate, it’s projected that New York City is missing out on almost $65,000 of hotel tax income from our members over the last four months of 2012 alone.
StayNYC members are working with elected officials to receive an exemption to the current law, so that we can continue to provide short term stay alternatives in New York City and help the city bridge the gap in its hotel tax revenue by paying our fair share.
As small business owners, we not only want what is best for our organizations, but we also care deeply about the surrounding boroughs and neighborhoods. We want to be able to contribute to our community by operating at full capacity and paying our fullest share of taxes, as we were prior to this 2011 law that has devastated so many of our family-owned businesses.