Bed tax under attack
Property rights group raises concern
about occupancy tax law
Published on 1/16/2004
By MIKE MENDER
mender@poststar.com
The Warren County occupancy tax came under fire Thursday in an Albany press conference by separate groups that are worried about the specific — and not so specific — language in the law.
“The thing we’re most concerned about is the aspect of forfeiture,” said Carol LaGrasse, president of Property Rights Foundation of America Inc., based in Stony Creek.
Specifically, LaGrasse said, Warren County’s law as written would allow the county treasurer in some cases to go after someone’s property if the owner became delinquent in sending occupancy tax receipts to the county.
“When there’s a prospective bankruptcy, the county can go after property to protect its interest,” LaGrasse said.
The law doesn’t define what is meant by a “prospective bankruptcy” and would leave it to the county treasurer to decide, she said. Nor does the law set thresholds defining what amount of delinquency would trigger a forfeiture.
“For a relatively small amount of tax owed, the owner could lose the entire property if you had an aggressive county treasurer,” LaGrasse said.
LaGrasse stressed that Property Rights Foundation is not necessarily opposed to the concept of an occupancy tax, nor is it joining in the lawsuit brought by two Warren County men challenging the 4 percent tax.
“We have very specific concerns about narrow aspects of the law,” LaGrasse said.
Similarly, Sheila Galvin, an attorney representing John Hunter, owner of Gore Mountain Accommodations, and William Peterson, owner of Evergreen Property Management, said her clients’ suit challenging the law deals with problems in the way the law is written.
“If they want to enact a bed tax, then do it properly,” Galvin said. “Others have done it with local laws that are not nearly as complex or convoluted.”
The purpose of Thursday’s press conference, she said, was to offer an understandable summary of the problems with the law.
“It’s a massive job just to get through the law,” Galvin said. “It’s full of internal inconsistencies. It’s inconsistent with state law. It’s rife with technical legal problems. The average person is going to give up before getting through even a few pages.”
One of the biggest problems with the law, Galvin said, is that it discourages access to the courts. For instance, it requires those challenging the levy of a tax in court to post bond equal to an amount the county treasurer estimates would be the county’s legal costs to defend against such a challenge.
“They have to come up with their own legal costs, their filing fees and then they have to front-end a guarantee of the county’s costs,” Galvin said. “That has a chilling factor on use of the judicial system.”
Another issue is that as written, the law would have lodging owners apply the 4 percent tax to the combined cost of lodging plus sales tax, Galvin said. “That’s a tax upon a tax.”
Those issues and others make it clear that the law needs to be rewritten, Galvin said.
The 4 percent tax went into effect Jan. 1. County Treasurer Francis O’Keefe reported no glitches in administering the tax and said that he found widespread cooperation among lodging property owners.
The suit challenging the law is before state Supreme Court
Justice Thomas Keegan, who has yet to issue any rulings in connection
with the suit.
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