Hochul signs STR regulation bill, requests chapter amendment
Gov. Kathy Hochul signed a first-of-its-kind bill regulating short-term rentals and requiring them to collect sales tax on Saturday Dec. 24, according to a New York state Senate press release and an approval memorandum from the governor’s office. Her approval was contingent on a number of changes to the bill (S.885C / A.4130C), which will be enacted as a chapter amendment when the legislature is back in session.
The bill was cosponsored by State Sen. Michelle Hinchey and State Assemblymember and Senator-elect Patricia Fahy, both Democrats. The previous form of the bill passed the senate in June 2023 and died in the assembly in early 2024, but finally passed both houses in June. It was delivered to Hochul on Dec. 12.
In a Dec. 23 statement from Hinchey’s office, the sponsoring lawmakers and representatives from the state Association of Counties, the Association of Towns and the state Conference of Mayors touted the bill as an important step.
“Our Short-Term Rental Registry is a breakthrough for New York’s housing future and a first-in-the-nation effort to hold billion-dollar booking platforms accountable in the communities they operate in,” Hinchey said in the statement. “Getting this done took serious teamwork with leaders from every level of local government, the tourism and hospitality industry and housing advocates who worked with us to make sure this bill would strike the right balance between supporting a local economic driver and working toward a future where housing is more accessible and affordable in New York.”
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Hochul’s requests
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In her approval memorandum, Hochul requested a number of changes to the bill that have been agreed upon by the legislature.
The bill, as submitted to the governor, would have required STR hosts and booking services to register with the Department of State, including STR units already registered with local governments. The bill also called for the collection of sales tax from all units, imposing regulatory requirements and reporting requirements for hosts and booking services. The enforcement and data sharing obligations would have fallen on the DOS.
The changes requested by Hochul, which will be incorporated in the form of a chapter amendment, largely deal with the registration system.
“This bill would have imposed significant unbudgeted costs on DOS and would have created a tax regime that differed from what I had previously proposed in my Executive Budget,” Hochul wrote the memorandum, listing her main concerns with the bill.
The largest change requested by Hochul was to create an “opt-out county-level registration system” instead of a statewide registration. The state, however, will still keep a database of data collected from quarterly reports from booking platforms. Other changes would be needed, Hochul wrote, to “avoid creating undue burden or unintended consequences for counties, localities, short-term rental hosts and booking services.”
Hochul also requested that the legislature “clarify rights and responsibilities for localities with existing registries, localities that ban short-term rentals or localities within counties that do not establish registries pursuant to this legislation.”
Airbnb Director of Policy Nathan Rotman expressed concern about the sharing of data and the burden placed on property owners and counties in a statement.
“Airbnb works closely with communities throughout New York, including through 37 county tax agreements that have raised millions of dollars in revenue throughout the state,” Rotman said. “This unnecessary bill imposes a new, unfunded mandate on counties and creates a complicated bureaucratic system that burdens homeowners trying to earn modest income to pay their bills. It also puts the personal information of hosts throughout the state at risk due to data sharing requirements.”
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County response
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Shaun Gillilland, chairman of the Essex County Board of Supervisors, said the legislation is a welcome step for the county. Essex County already has an STR registry that towns and villages can access upon request, but the information collected from the state from booking platforms will be a supplement to that information, Gillilland said. This is particularly true for towns enforcing their own policies and dealing with complaints.
However, the biggest boon for the county will be the sales tax collected by booking services for STR rentals.
“From the county’s perspective, that was our number one concern that we advocated for,” Gillilland said. “The number of STRs we have in the county, that’ll be a big chunk of revenue that hopefully we can take off the property tax.”
Franklin County Treasurer Fran Perry said their attorneys were in the process of reviewing the bill and determining what it might mean for the county, as of Tuesday. However, she agreed that the information and funding made available by the bill would be an asset for the county.
As a rough estimate of the financial benefit, Perry said the county collects around $1,000,000 each year from the 5% occupancy tax on STRs. Since the county would receive half of the 8% sales tax collected by the state, the sales tax on those same STRs could likely boost the county’s revenue by approximately $800,000, although there is no way to predict the exact numbers at this point.
Like Essex County, Franklin County likewise has a registry of STRs based on numbered certificates associated with the occupancy tax. However, the additional information provided by the state would be useful, Perry said, since the county does not currently receive information from hosting platforms like Airbnb about the registered STRs in the county.