Kingston’s Proposed Bed Tax Threatens the Hospitality Economy We’ve All Worked to Build
By Michael Oates, Don Tallerman, and Corryn Carey
Michael Oates is President and CEO of the Hudson Valley Economic Development Corporation. Don Tallerman is Chair of the Board of Ulster Strong.
Corryn Carey is the owner of The Strand House in Kingston’s Waterfront district.
Kingston is having a moment. After years of work by hoteliers, restaurateurs, short-term rental hosts, and the small businesses that ring our historic districts, the city has emerged as one of the Hudson Valley’s most sought-after destinations. Visitors come for the waterfront, the Stockade, the music venues, and the food scene. They stay overnight, if they can find a room. They spend money. They tell their friends.
That momentum is fragile. And the City of Kingston’s proposed occupancy tax — commonly known as a bed tax — puts it directly at risk.
Consider what a guest already pays. New York State sales tax (8%). Ulster County’s occupancy tax, which the County itself doubled in February 2024 (to 4%). Layer a new City of Kingston bed tax on top (3%), and a visitor booking a room here would face one of the highest combined lodging tax burdens in New York State (15%), exceeding the rates charged in Yonkers (14.38%), Rochester (14%), Albany (14%), Ithaca (13%), Binghamton (13%), Saratoga Springs (13%) and even New York City (14.75%). Kingston is clearly not Manhattan. It’s a regional, price-sensitive destination competing for weekend travelers, business guests, wedding parties, and the construction and film crews who book extended stays while working in our community. Lodging business in Kingston tell us those travelers do in fact comparison-shop. When the total at checkout climbs, they book in Saugerties, Rhinebeck, Catskill, New Paltz, or skip booking a second or third night altogether.
This is not hypothetical. It is how lodging markets work. And the consequences do not stop at the front desk. A guest who chooses a hotel in another community eats dinner there; buys coffee there; visits galleries, bookshops, and breweries there. The bed tax debate is often framed as a tax on tourists - out-of-towners. But in a regional, integrated tourism economy, a more accurate description is a tax on Kingston’s restaurants, retailers, attractions, and cultural institutions — because they lose the secondary spending when a visitor decides to stay somewhere else. Hospitality is Kingston’s front door to the rest of the local economy, and you cannot raise the cost of walking through that door without consequences for everything behind it.
There is also a question of fairness. Kingston retailers, restaurants, and service providers collect sales tax, as do lodging operators. But the lodging industry also collects the county occupancy tax, and would now be asked to collect a third tax - a city-specific surcharge that no other industry in the city faces. When a municipality decides one industry should bear a unique burden, it owes that industry, and the public, a clear explanation of why. Singling out a sector that employs our neighbors and anchors our downtown sets a troubling precedent for whichever sector might be next.
Timing matters too. Hotels, inns, B&Bs, and short-term rental hosts are navigating elevated insurance, labor, property taxes and travel costs. Many small operators — the locally-owned, family-run inns that give Kingston its texture — do not have the margin to absorb the booking softness a higher all-in price will produce. They will respond the way every small business must: cut hours, defer reinvestment, or in the worst cases, close.
Proponents have suggested the new revenue could underwrite new or existing city programs, or even offset property tax pressure. While laudable goals, the better solution would be a tax policy that is broad, predictable, and shared — not one that loads the burden onto a single, highly visible industry. And to date, no research has been conducted on the impact of any proposed bed tax.
There is a better path. Kingston should pause this proposal, and convene a genuine working session with the people who would actually be impacted by this tax: hoteliers, short-term rental hosts, restaurant owners, the chamber, and economic development partners. Together, that group can share real industry data, help to model real revenue impacts and — if a lodging tax is ultimately pursued — design a structure that dedicates a portion of the taxes collected to further growing the city’s tourism base, as the County does with a portion of its occupancy tax collections.
At this point, Kingston should be seeking new investment in lodging and protecting the progress that has already been made, not taxing it out the door. We urge the Common Council to postpone its final vote on a bed tax as currently proposed, and encourage them to come to the table with those who know this industry in detail to understand the impacts of this proposal and to design a fairer structure that supports, rather than stifles, our city’s tourism sector.
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