Suffolk Urging Tax on Home Rentals

by FIN |

By Timothy Bolger

Suffolk County is cracking down on Fire Island homeowners that rent their residences for less than 30 days at a time, without charging renters the 3 percent hotel/motel tax, drawing ire from some.

Suffolk County Comptroller John M. Kennedy Jr. announced in December that his office’s auditors would be checking to ensure hotels, motels, bed and breakfasts and private homeowners that rent their homes for short periods were contacted to ensure taxes are being collected. Some say the county is selectively enforcing the tax collection by not informing all county homeowners of the potential need to charge the tax.

“Many, many, many bed and breakfasts, seasonal homes, lodging homes start the conversation with, ‘we never knew,’” Kennedy told the Suffolk County legislature’s economic development committee on March 16. “There’s a variety of ways that we can approach that. One of them is, we all know, ignorance of the law is no excuse.”

The tax, which generates about $9 million annually for the county, is used to fund tourism promotion, maintenance of historic sites, county parks and other related programs. The comptroller’s office has also been urging private homeowners that rent their home for a week or two at a time on the East End of Long Island to also begin collecting the tax.

One homeowner on FI who rents a house balked when the comptroller’s office called, at first thinking the callers were scammers, like the fake IRS income tax collector call scam. Once it was clear that the hotel tax wasn’t a scam, the homeowner, who asked not to be named for fear of retribution, said the comptroller’s staffers to be unprofessional and overly aggressive. One of the biggest concerns was being asked for back taxes on rentals long since past.

“It’s not that I object to paying taxes,” said the homeowner, noting that the renters pay, not the homeowners, but some of the renters prepaid last year and their checks were long since cashed. “If you buy a suit at Nordstrom, you pay the tax when you buy it. They don’t call you up three months later and say, ‘hey we forgot to charge you tax.’”

The homeowner—one of several on FI who’ve publicly complained about the crackdown—questioned whether it is legal that the comptroller’s office didn’t inform all county homeowners who can potentially rent their home for short stints. When a county legislator asked the comptroller how homeowners are being identified for enforcement, Kennedy said his auditors are working off town and county rental property registries, as well as checking rental websites.

“Once a property is put into the chain of commerce, then it falls under our purview for the purposes of collection,” Kennedy said. “So we’ve had site visits to particular communities, particularly seasonal communities. We have done a tremendous amount of work to promote in the first instance and to make brokers and real estate agents and other folks aware of this of this obligation.”

In an attempt to ensure compliance, this year the county legislature approved a measure to lower the daily fine for noncompliance from $100 to $50 so as to not bankrupt businesses. Like hotels and motels, homeowners are required to register with the county to be allowed to collect the tax. Registrants are required to file quarterly reports.

The villages of Saltaire and Ocean Beach both have codes in place so homeowners are prohibited from renting their houses to groups of people who aren’t related. Such laws are intended to avoid loud group party houses. Ocean Beach Mayor James Mallott declined to comment on the comptroller’s crackdown. Yet recently Saltaire Mayor John Zaccaro proposed making the minimum home rental time to two weeks in response to the popularity of websites such as Airbnb.

“There’s a clear enforcement issue where we have to figure out how to stop individuals from renting illegally,” one of the half dozen residents who spoke out in favor of the proposal said at the July 2 Saltaire board meeting.

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j heyerJoanne GorelickChristine RudkinChrissy RudkinPatrick OBrien Recent comment authors
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j heyer
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j heyer

I am willing to take phone calls about this example of bad planning 516 250 3404. so far this is the only online site mentioning the situation. When the county is wrong people can have it changed.

Joanne Gorelick
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Joanne Gorelick

FYI, I am an Ocean Beach homeowner who is involved in a lawsuit against the comptroller’s office, pro se. I came up with my case really quickly last January, when the SCCO threatened to take action against me. I lost my case, and it may be due to the lack of clarity in my original petition. I am now working on my appeal, which I will be submitting in early January. No one is able to join my action, but something that can be helpful is if someone could get together a petition, with a list of homeowners, that says… Read more »

Christine Rudkin
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Christine Rudkin

Patrick, I am trying to put together a class action suit on this. Are you a homeowner?

Chrissy Rudkin
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Chrissy Rudkin

help, I am being harassed by this agency. They are making up numbers and saying I owe tens of thousands of dollars that is completely false. We need to get a class action suit against this criminal behavior and get a real judge to interpret the laws correctly and then and only then I will comply with this strange inforcement of a law that has been on the books for years but is just now being adjusted for the purpose of making kennedy a name.

J Heyer
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J Heyer

yes this is yet another attempt by county government to eat off your plate. It is basically unconstitutional disgusting and yet no attorney will take the case. Brian Chezney (airbnb) also backed off the effort. I hope there is some expert on LI willing to fight the county on this misappropriation of our money.

Patrick OBrien
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Patrick OBrien

For purposes of the sales tax, NYS Publication 848 (2/15) makes it irrefutably clear that this tax does not pertain to homeowners that rent out their homes, stating, “As a general rule, the rental of individual, privately owned, summer homes, camps, beach houses and similar properties, where no services commonly associated with hotel occupancy are provided, constitute the rental of real property,” and concludes that they do not need to collect sales tax on their receipts. It further clarifies, “If a person rents a room in his or her residence to a transient occupant on a less-than-regular basis, the room… Read more »