City wants input on tax

Lambertville’s four inns and three bed and breakfasts may see a 1 percent tax on top of the state’s 7 percent occupancy tax.

By: Linda Seida
   LAMBERTVILLE — The City Council is seeking input from the owners of Lambertville’s four inns and three bed-and-breakfasts before it imposes a 1 percent hotel and motel occupancy tax on the heels of the state’s recent authorization of a 7 percent occupancy tax.
   The council introduced an ordinance Monday that would authorize the municipal tax, but will hold a public meeting Aug. 4 at 7 p.m. to discuss the issue before any vote is taken.
   In the meantime, the city clerk will send information about the ordinance to proprietors of the Inn at Lambertville Station; the Lambertville House; the Inn of the Hawke; the York Street House Bed and Breakfast; the Bridge Street House Bed and Breakfast; the Martin Coryell House Bed and Breakfast; and the Chimney Hill Farm Estate & Ol’ Barn Inn.
   In total, establishments in the city offer about 100 guest rooms.
   Mary Freedman, who runs the Martin Coryell House Bed and Breakfast on North Union Street with her husband, Rich Freedman, was dismayed Tuesday morning to realize the new 7 percent occupancy tax she soon must impose on her guests could turn into an 8 percent tax if the city opts to enact a municipal tax.
   "It’s just not the best time to be hitting businesses with something like this," she said. "The travel industry is hurting right now. The 7 percent is going to hurt."
   The new state tax places her in an awkward position with guests who already have reservations in place, she said. She contemplated how to tell them she might have to add another tax to the total price.
   "Business is tough as it is right now," she said. "Smaller businesses may have to cut their rates."
   Guests might even decide to head to a location that isn’t burdened with such a tax, she added.
   If the tax is imposed, during the first year of collection it could bring as much as $40,000 to Lambertville, and beginning the following year it could net the city as much as three times that amount annually, according to Mayor David Del Vecchio. Money collected from the tax would go toward tax relief, he said.
   When the state recently enacted a 7 percent hotel and motel occupancy tax, it gave municipalities the option of enacting their own 1 percent tax for a total 8 percent occupancy tax. By law, municipalities’ share will increase to 3 percent in July 2004 while the state’s portion will drop to 5 percent. The hotel occupancy tax would be collected in addition to the state’s 6 percent sales tax.
   According to state estimates, if every municipality authorized the tax, they could collect $16 million total. The state plans to collect $111.4 million as its share.
   Like Lambertville, Stockton also is considering authorizing the occupancy tax. Council members there, too, have invited input from local proprietors.
   The tax would take effect Sept. 1. Municipalities could begin collecting tax money Sept. 30.