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The purpose of this bill analysis/summary is to provide an educational summary to the public of the provisions of the Hinchey-Kruger Short Term Rental Bill. The Bill purports to regulate short-term rentals at the state level and to apply taxes to them. This analysis highlights the specific policies contained within the Act and a copy of the Bill sponsor’s summary is appended.
Defines “Short-Terms Rental Units” as:
“An entire dwelling unit, or a room, group of rooms, other living or sleeping space, or any other space within a dwelling, made available for rent by guests for less than thirty consecutive days, where the unit is offered for tourist or transient use by the short-term rental host of the residential unit.”
Prohibits offering as a short-term rental a “single room occupancy,” or “the occupancy by one or two persons of a single room, or of two or more rooms which are joined together, separated from all other rooms within an apartment in a multiple dwelling, so that the occupant or occupants thereof reside separately and independently of the other occupant or occupants of the same apartment.”
Caps non-tenant or non-permanent-resident occupancy at 90 days.
Create as a Mandatory Registry System. The NYS Department of State will create a statewide mandatory registry. If a locality has a system, it can be integrated or overlapped with the State’s. If a locality does not, it can create its own, use the States, or create one and overlap the two. There is no single uniform statewide system created.
Applies the following taxes to all rental earnings/income under the State’s sales and hotel/motel tax laws:
Local Sales Tax
State Sales Tax
Local Room Occupancy Tax
State Room Occupancy Tax
Registration fees (Local and State)
Short Term Rental Hosts Must:
Register the STR Units, every two years, including for primary homes and for any sized rental business, and advertise registration number everywhere.
Keep a Guest Registry for two calendar years to track all guests, including for primary homes (which the online services will do for us; they are required).
Guest Registry Requirements: “including the date of each stay and number of guests, the cost for each stay, including relevant tax, and records related to their registration as short-term rental hosts with the department of state. As a requirement for registration under section twenty-two of this article, hosts shall provide these records to the department of state on an annual basis.
Follow hotel fire safety protocol, including for primary homes (egress diagram, extinguishers, emergency numbers etc.).
Have permission to STR from an owner if not the owner of record.
Creates a Statewide Three Strikes Rule for Registered STRs:
“The department of state may revoke the registration of a short-term rental host upon a determination that the short-term rental host has violated any provision of this article at least three times in two calendar years, and may determine that the short-term rental host shall be ineligible for registration for a period of up to twelve months from the date of such determination.”
Creates a $200 per day fine for unregistered offerings and for failure to comply with state orders (which appears to compound to $400 for registration issues as compared to other issues; each violation per day also may independently be a strike under the three-strikes rule in the current draft).
Home Rule/Locality STR Banning Expressly Allowed.
Expressly allows banning Short Terms Rentals by local governments under NYS Home Rule, contradicting existing New York State Real Property Law (rights regarding non-tenant licensing of property).
Goes against the examples of New Hampshire state law, which prohibits such local patchwork bans, and the notion of statewide, uniform regulation.
The online booking service (Airbnb, VRBO, etc.), must also register and pay a fee, as well as give to the State records for hosts for bookkeeping for taxes/incomes, and maintain for records a copy of all host’s Guest Registry.
APPENDIX A: NYS SENATE SPONSOR MEMORANDUM OF PROVISIONS
Relates to short-term residential rentals of private dwellings in certain municipalities. S885 (ACTIVE) - SPONSOR MEMO
BILL NUMBER: S885 SPONSOR: HINCHEY [Introduced by Sens. HINCHEY, KRUEGER]
TITLE OF BILL:
An act to amend the multiple residence law, the multiple dwelling law, and the tax law, in relation to short-term residential rental of private dwellings in certain municipalities
PURPOSE OR GENERAL IDEA OF BILL:
To create a registration system for short term rentals in New York State and allow for the collection of sales tax & applicable occupancy tax generated from such rentals to the state and localities.
SUMMARY OF PROVISIONS:
Section one amends the multiple residence law by adding a new article 2-a to establish the definitions, regulation, registration, exception, penalties, enforcement, and data sharing of short-term residential rental units. Section two amends the multiple dwelling law by adding a new article 2-a to establish the definitions, regulation, registration, exception, penalties, enforcement, and data sharing of short-term residential rental units. Section three amends subdivision (c) of section 1101 of the tax law, as added by chapter 93 of the laws of 1965, paragraphs 2, 3, 4 and 6 as amended by section 2 and paragraph 8 as added by section 3 of part AA of chapter 57 of the laws of 2010, and paragraph 5 as amended by chapter 575 of the laws of 1965. Section four amends subdivision (e) of section 1105 of the tax law by adding a new paragraph 3 to post the rent for every occupancy of a room in a hotel or short-term rental offered for rent. Section five amends subdivision one of section 1131 of the tax law to define the entities responsible for the collection of applicable taxes. Section six amends section 1132 of the tax law by adding a new subdivision (m) to outline the process of applicable tax collection and remittance to appropriate taxing jurisdiction. Section seven amends paragraph 4 of subdivision (a) of section 1136 of the tax law to exclude the rent from occupancy of a short-term rental unit facilitated by a booking service if the owner of such rental returns to reside in such residence. Section eight amends section 1142 of the tax law by adding a new subdivision 16 to publish a list on the department’s website of booking services whose certificates of authority have been revoked. Section nine amends subpart A of part 1 of article 29 of the tax law by adding a new section 1200 to define hotels. Section ten states that a county, city, town, or village government may enact a local law prohibiting or further limiting the listing or use of dwelling units as short-term residential rental units. Section eleven sets the severability of this act if any application of any provision is held to be invalid. Section twelve states the effective date.
JUSTIFICATION:
New York State is facing a dire shortage of housing supply, specifically affordable and workforce housing, which is causing instability across our communities. While solving the housing crisis will take significant investment and bold legislative action, one area of housing policy that must be addressed is the extreme proliferation of short-term rentals. Municipalities across upstate New York saw a record influx of relocated residents and visitors alike, with Hudson and Kingston becoming the top two moved-to-places in the country during the COVID-19 pandemic. For many, the ability to welcome visitors for short-term stays has been a welcomed source of income, and for our smaller cities and towns, increased tourism has bolstered their economies. However, while this resurgence played a significant, and unforeseen, role in supporting our Main Streets and providing additional income streams for local residents, it also caused an already precarious housing market to become nearly non-existent and has since turned good housing stock into vacation rentals taking these homes off the market indefinitely. Municipalities need better tools to under stand how this economic driver can help, without displacing local residents and compounding an already growing problem all in the name of profit. Additionally, many of these same municipalities have been forced to spend significant resources to manage their short-term rental issues, often leaving neighboring towns with differing regulations. This causes confusion among homeowners, visitors and law enforcement and forces municipalities to spend resources they often don’t have in order to protect their residents. This legislation, for the first time, develops statewide guidance on short-term rentals, including a rental registry, in order to give municipalities the information and the revenue they need to make smart decisions to help right-size the short-term rental market in their specific communities. Also, municipalities with their own short-term rental registration systems may continue to use them and short-term rentals in those municipalities do not need to register with the state. Finally, the tax collection provisions apply to short-term rentals statewide, regardless of whether municipalities have their own registration systems.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
This bill would actually increase revenue for the state and localities.
EFFECTIVE DATE:
This act shall take effect on the one hundred twentieth day after it shall have become a law.
Published: April 14, 2023 Updated: April 14, 2023