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FOR IMMEDIATE RELEASE
PR- 506-08
December 29, 2008

MAYOR BLOOMBERG SIGNS LEGISLATION TEMPORARILY INCREASING THE HOTEL TAX

Remarks by Mayor Bloomberg at a Public Hearing on Local Laws

"The third bill before me today is Introductory Number 879-A, sponsored by Council Members Fidler, Brewer, Comrie,  Felder, James, Mark-Viverito, Martinez, Nelson, Palma, Seabrook, Sears, Vann, Jackson and Reyna.  Introductory Number 879-A increases the additional tax on the occupancy of hotel rooms throughout the City.

"The current City hotel tax is 5 percent on the room charged per occupied room night.  In addition, there is a flat fee for rooms over $40 a night at the rate of $2.00 per day.  These two charges-the tax and flat fee-comprise the Hotel Tax.  The aggregate hotel tax on a room rental in the City is 13.375 percent - comprised of the City hotel tax of 5 percent, City sales tax of 4 percent, State sales tax of 4 percent, and the Metropolitan Commuter Transportation District sales tax (for counties served by the MTA) of .375 percent.  In light of these tough economic times, and in order to avoid severe cuts in services, the City is faced with the daunting task of considering increasing taxes.  In keeping with State authorization, Introductory Number 879-A increases the City's hotel tax from 5 percent to 5.875 percent, bringing the aggregate hotel tax to 14.25 percent, which is still comparable to other municipalities.

"This new rate would go into effect on March 1, 2009 and remain in effect until December 1, 2011, at which point the hotel tax would revert back to 5 percent. The increase of the hotel tax would raise approximately $20 million in Fiscal Year 2009 and approximately $61 million in Fiscal Year 2010.

"I would like to thank the City Council for working with the Administration to reach an agreement on the budget.







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