Modified: March 30, 2020 2:47pm
Created: March 30, 2020 2:47pm
In a spirit of helping struggling businesses, Comptroller Mychajliw is waiving penalties for hotels that are late with hotel occupancy tax payments
(Buffalo, NY) – In a letter to hotel and motel owners across the region, Erie County Comptroller Stefan I. Mychajliw announced he is temporarily waiving all penalties for hotels that were late paying their March 20th, 2020 Hotel Occupancy Tax. Hotels must request in writing to have the penalty waived for their late payment.
Comptroller Mychajliw also announced he is automatically waiving a future penalty for all hotels that are late paying the next quarterly payment due Erie County on June 20th. This payment covers the period when the Coronavirus crisis hit hotels hardest: March 1st to May 31st. Hotels will not need to request a penalty waiver in writing. For the June 20th Hotel Occupancy Tax payment, Comptroller Mychajliw is automatically waiving all penalties for hotels that are late with their payment on that date.
This temporary waiving of penalties could be extended depending on whether or not the economy rebounds in a timely manner. Section 20-A of the Bed Tax Law permits the Erie County Comptroller to levy a 5% penalty of the total amount due for any hotel that is late paying its Hotel Occupancy Tax.
Under the law, Hotel Occupancy Tax revenue cannot be collected and used for the business or expenses of the hotel. When you check out of a hotel, you pay this tax on your bill, and the hotel should set the money aside for quarterly payments to Erie County. The revenue belongs to Erie County. Same as businesses that collect sales tax. That revenue doesn’t stay in the register. It can’t be used by that business for their operations.
“I wholeheartedly understand that businesses are not supposed to keep this tax or use it in any way for their operations. I get it. These are trying times. The hotel industry has been crippled by the Coronavirus crisis. I’m going to help them in any way I can under the law. The last thing hotels need to worry about right now is being penalized by the government for a late payment.”
“In a spirit of compassion and concern for struggling businesses, I am going to waive all penalties for any hotel that was late paying on March 20th. I’m also issuing a blanket waiver, eliminating penalties for all hotels when their next payment is due on June 20th. Government should not treat businesses in a punitive manner during this crisis. We need to help folks get back on their feet again,” said Comptroller Mychajliw.
Under Section 7-B of the Bed Tax Law, hotels are required to collect Hotel Occupancy Tax as a trustee for the County of Erie. The operator (hotel) is responsible for the collection of the tax.
In his letter to hotels and hotel owners, Comptroller Mychajliw encouraged them to email and call the Office of Erie County Comptroller to work on a potential payment plan if they are facing financial difficulties.
“This is no different than a family that is struggling to make their mortgage or credit card payments. Please call our office. Do not ignore the payment. We will work with you during these tough times. It is better to call us rather than pretend the payment does not exist. Under the Bed Tax Law I do not have the authority to suspend the payment of the tax. I do have the authority to suspend penalties,” added Comptroller Mychajliw.
The commonly called “Bed Tax Law” was created in 1974. The taxing authority of it was placed under the Office of Erie County Comptroller in 2007.
Any hotel, motel or building that regularly lodges guests for less than 30 days is required to collect, then remit Hotel Occupancy Tax.
- The rate of three percent (3%) is to be charged and paid upon the rent for every occupancy of a room in a hotel with 30 or less rooms located in Erie County.
- The rate of five percent (5%) is to be charged and paid upon the rent for every occupancy of a room in a hotel with more than 30 rooms located in Erie County.
Source: www.erie.gov/comptroller, Local law No. 12-1974, and Chapter 614 of the Laws of the State of New York
A suspension of penalties does not mean these payments can be ignored. Additionally, there is a temporary suspension of penalties, per Erie County Local Law No. 12-1974, the Comptroller’s Office must still charge interest on late payments, which will be assessed on the 20th of each month that payment is not received.
In 2019 the Office of Erie County Comptroller collected $11,953,350 in bed tax revenue.