NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5686
SPONSOR: Romero TITLE OF BILL:
An act to amend the real property law and the tax law, in relation to
short term rental units; amends a chapter of the laws of 2024 amending
the real property law and the tax law relating to short-term residential
rental of private dwellings in certain municipalities, as proposed in
legislative bills numbers S. 885-C and A. 4130-C, in relation to the
effectiveness thereof; and repeals certain provisions of the tax law and
such chapter relating to the authority of local governments to prohibit
certain short term rental units
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to make amendments to Chapter 672 of the
Laws of 2024.
SUMMARY OF PROVISIONS:
Section one of the bill amends the article heading of Article 12-D of
the real property law to remove the word "residential".
Sections two through eight of the bill amends the real property law to
provide for the regulation and registration of short-term rental units
with counties that choose to not opt-out of the registration system no
later than nine months after the effective date.
Sections nine through twenty-two of the bill amends the tax law to
provide for the collection of sales tax on short-term rental units.
Section twenty-three of the bill amends the tax law to clarify that when
a county chooses to not opt-out of the registration system for short-
term rental units, such county or any local government in such county
that is authorized to impose a tax on hotel and motel occupancy is
authorized to amend the local laws imposing such tax to include short-
term rental units.
Section twenty-four of the bill repeals duplicative language allowing a
county, city, town, or village government to enact a local law prohibit-
ing or further limiting the listing or use of dwelling units as short-
term rental units.
Section twenty-five of the bill clarifies the impact on New York City
and their ability to collect sales tax.
Section twenty-six of the bill clarifies the impact on any existing
agreements or contracts entered into by a booking service and a munici-
pality for the voluntary collection of any hotel and motel occupancy
taxes.
Section twenty-seven of the bill amends the prior effective date to
provide for the collection of taxes beginning March 1, 2025.
Section six of the bill relates to 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 COVID19 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 hous-
ing market to become nearly non-existent and has since turned good hous-
ing stock into vacation rentals taking these homes off the market indef-
initely. Municipalities need better tools to understand how this
economic driver can help, without displacing local residents and
compounding an already growing problem all in the name of profit. Addi-
tionally, 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 registra-
tion systems.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately, provided, however, that sections
two through twenty-six of this act shall take effect on the same date
and in the same manner as a chapter of the laws of 2024 amending the
real property law and the tax law relating to short-term residential
rental of private dwellings in certain municipalities, as proposed in
legislative bills numbers S. 885-C and A. 4130-C, takes effect.
