Franklin County seeks contractor to help with occupancy tax collections

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MALONE — Franklin County legislators are planning to begin looking for a contractor to ensure individuals and businesses that should be collecting the county’s occupancy tax are doing so.

County Legislator Carl Sherwin, D-Malone, raised the issue on Thursday during a meeting of the county board’s Economic Development and Planning committee.

The ideal candidate, said Sherwin, would have experience in both law enforcement and real estate, as well as being able to use the internet to find personal ads for vacation rental properties.

“Initially, it’s going to take a lot of work,” Sherwin said.

The occupancy tax, also known as the bed tax, was instituted in Franklin County beginning in November of 2015. The tax charges a 5 percent fee for stays at temporary accommodations, such as hotels, motels and campgrounds. The revenue generated from the tax goes toward tourism marketing for the county.

Franklin County has experienced some difficulty in making sure all such facilities collect the tax from their customers. Local business owners who largely supported the bed tax have noted that their competitors are benefiting from the tourism marketing without paying into it.

The county Legislature previously attempted to encourage more vacation renters to sign up for bed tax collection voluntarily in May; a one-month grace period would allow businesses to sign up without having to pay back taxes from November 2015.

Only eight property renters took the offer in the one-month period, according to Sherwin on Thursday. Combined with previously registered businesses, it is estimated that 153 businesses hosting temporary stays are registered to collect the bed tax as part of their room bills.

About half of those registered are covered through the accommodations website Airbnb, which allows users to advertise and rent space to customers. The website entered into a collection agreement with the county last year, and began collecting the 5 percent surcharge from their users starting in October 2016.

Members of the county’s Tourism Advisory Committee — composed of local business leaders — estimated in May that approximately 1,200 property owners advertise as temporary accommodations in Franklin County.

While county officials have said that number is not verified, Sherwin said on Thursday that it is likely that there is a significant number of such operations not paying the bed tax in violation of the law.

“They’ve had every opportunity,” said Legislator Don Dabiew, D-Bombay.

The urgency of increasing participation is especially clear as the county enters the summer months, continued Sherwin, as the middle of the year represents what is likely to be the largest portion of the bed tax that the county collects for the year.

Sherwin said he intends to have the county Legislature vote on a resolution next week to authorize County Manager Donna Kissane to enter a contract with a person willing to take on the bed tax collection agent position. In the meantime, legislators are looking to study how to balance the costs to pay for such a position against the future increase in bed tax funding from increased business participation.

Another avenue the county legislators explored was purchasing a software program to help locate vacation rental advertisements online to help track down commercial renters who qualify for collection. Sherwin made reference to a recent article from the Adirondack Daily Enterprise which described a similar plan under consideration by Essex County officials.

The article mentions two systems offering the service: Taxcrawler, based in Toronto, and Short Term Rental Helper, developed in Garden City, Color. STR Helper uses bots — independently operating digital programs — to compile searches of rental properties within the county, while Taxcrawler has a human team perform the same function.

The difference is reflected in both systems’ price tag; STR Helper would cost Essex County $15,000 per year, while Taxcrawler is estimated to cost $46,000 per year.

Sherwin was hesitant regarding Taxcrawler due to the price, especially in proportion to funds already raised by the bed tax. The first 14 months of the county’s bed tax — November 2015 to December 2016 ­— raised just $49,000; in the first six months of 2017, approximately $112,000 has been raised so far.

STR Helper’s cost to the county could further be reduced if the county’s contracted tourism agency, the Regional Office of the Sustainable Tourism (ROOST), could be convinced to assist the county. County legislators are planning to reach out to ROOST on the issue next week.

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