Emergency Executive Order #98 Government-Issued Change of New York City Hotel Occupancy Tax
Please note the following Emergency Executive Order issued for New York City:
“EMERGENCY EXECUTIVE ORDER
WHEREAS, on March 7, 2020, New York State Governor Andrew Cuomo declared a State disaster emergency for the entire State of New York to address the threat that COVID-19 poses to the health and welfare of New York residents and visitors; and
WHEREAS, Emergency Executive Order No. 98, issued March 12, 2020 and extended most recently by Emergency Executive Order No. 192, issued April 2, 2021, contains a declaration of a state of emergency in the City of New York due to the threat posed by COVID-19 to the health and welfare of City residents, and such declaration remains in effect; and
WHEREAS, this Order is given because of the propensity of the virus to spread person-to-person and also because the actions taken to prevent such spread have led to business closures and increased unemployment; and
WHEREAS, the COVID-19 pandemic has led to a decline in tourism, and the hotel sector in New York City has been substantially impacted, with jobs, inventory, occupancy rates, and room rates sold, all down substantially, resulting in extraordinary economic loss for the sector; and
WHEREAS, thus far in Fiscal Year 2021, hotel tax revenue is down approximately 89 percent as compared with Fiscal Year 2020; and
WHEREAS, to aid in New York City’s post-pandemic economic recovery, it is necessary to provide economic relief to this hard-hit industry, which would enable more hotels to remain open or to reopen, to keep New Yorkers in the hotel trade employed, and to boost tourism in New York City; and
WHEREAS, immediate relief is warranted in order to assist in the economic recovery of the New York City hotel industry;
WHEREAS, hotel operators and room remarketers remit the hotel occupancy tax on a quarterly cycle and the elimination of the hotel occupancy tax rate of 5.875 percent for the period commencing on June 1, 2021 and ending on August 31, 2021, would reduce the cost of a hotel room and thereby stimulate higher demand for hotel rooms and tourism in New York City or allow hotels to charge more for rooms; and
WHEREAS, the overall leisure and hospitality sector lost approximately 257,000 jobs from March through December 2020.
NOW, THEREFORE, pursuant to the powers vested in me by the laws of the State of New York and the City of New York, including but not limited to the New York Executive Law, the New York City Charter and the Administrative Code of the City of New York, and the common law authority to protect the public in the event of an emergency:
Section 1. a. I hereby suspend paragraph (3) of subdivision a of section 11-2502 of the Administrative Code of the City of New York to the extent necessary to provide for the reduction of the tax for occupancy of a room in a hotel in the City of New York imposed by such paragraph to zero percent for any such occupancy from June 1, 2021 through August 31, 2021.
b. Nothing in this section shall affect the imposition of the tax for the occupancy of a room in a hotel in the City of New York pursuant to paragraph (2) of subdivision a of such section.
§ 2. This Emergency Executive Order shall take effect immediately, and shall remain in effect for five (5) days unless it is terminated or modified at an earlier date.“
To facilitate this change in your PMS, please follow the below steps. Please note, the charge code shown will most likely be different in your PMS and may be named differently (CHARGE CODE DESCRIPTION), so please ensure you are modifying the correct tax (the tax calculating at the 5.875% tax rate currently).
Tax changes can be set on the tax charge code(s) in StayNTouch Cloud PMS. However, before you can make these changes, first navigate to Settings > Financials > Financial Settings > Turn ON the TAX RULES toggle.
Once you have turned ON the TAX RULES toggle, navigate to Settings > Financials > Charge Codes and determine which tax code(s) you wish to change. In the below example, we will change tax code ‘A’.
Upon opening tax code ‘A’ and scrolling down, you’ll see new options for Enable LOS and Enable Nights Range:
- Enable LOS allows you to add a tax rule based on the number of nights for which a reservation is created. This is used if the tax is different for guests staying for a specified extended period (e.g., 30 nights) as opposed to fewer nights.
- Enable Nights Range is typically the default and allows you to set a different tax for a period of nights.
In this instance, we wish to configure a scenario in which tax is 0% for June to August 2021, so select Enable Nights Range. Next, select + ADD NEW TAX RULE, choose Date Range, and indicate the appropriate dates.
Finally, select SAVE CHANGES.
Please note, this change will impact all existing reservations on the books for the date range indicated. This may have an impact on deposits that have been collected for guests already booked over these dates. If this is the case for your property, it may be advisable to run the Guest Deposit Report from Reports > New Report for the months of June, July, and August to highlight where deposits taken now exceed deposits required, and refunds may need to be processed.
If you prefer to manage the exemption of taxes on a reservation by reservation basis, this can be achieved using tax exempt types as indicated in this article.