On Thursday, April 1 the Ontario County Board of Supervisors met for its regular monthly meeting. During the session, the Board held a public hearing regarding a proposed public law to limit the fees that can be charged by third-party delivery services and considered a Resolution to apply the County’s Occupancy Tax to facilities with three rooms or less.
The proposed public law to limit third-party delivery service fees was brought forward to prevent potential price gouging during declared emergencies, such as the ongoing COVID-19 crisis. The proposal sought to limit fees charged by restaurants by such providers as Uber Eats, Grubhub, DoorDash, or similar services. Under the proposal, a “Declared Emergency” would exist when there was a disaster emergency declared by the Governor of the State of New York or the Chair of the Ontario County Board of Supervisors declares a State of Emergency. The law would limit delivery fees to 15% of the cost of the order and other fees to 5% of the cost of the order. The law only related to the fees charged restaurants and the proposal did not have any impact on charges assessed customers placing orders via third party delivery services. The full text of the proposed law can be viewed at https://ontariocountyny.gov/1106/Local-Laws.
A representative of Grubhub stated “Fee caps are well-intended but counterproductive at a time when restaurants need more support, visibility and order volume than ever. They impact how many orders restaurants receive, which drives down pay for drivers by reducing the number of deliveries available. Caps also increase costs for diners and disrupt an essential supply chain of meals. Ultimately, fee caps do the opposite of what they’re intended to do, costing valuable jobs, tax revenues and important economic activity.”
A DoorDash spokesperson responded that “DoorDash has always supported restaurants. Pricing regulations could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers. Pricing regulations can also remove options available to restaurants by limiting their ability to opt-in to additional services to help their business. We remain focused on working with policymakers to reach solutions that better support restaurants, customers, and Dashers.”
Fingerlakes1.com also reached out to Uber Eats for comment but had not received any response at the time of publication.
The public hearing did not receive any comments from the community. The Board’s next step is to consider a resolution to implement the proposed Public Law. The resolution would likely be considered by a Board Committee on April 14, 2021, and then receive full Board consideration on April 22, 2021.
During its regular business, the Board considered a resolution calling for the New York State Legislature to amend New York’s tax law regarding occupancy taxes. The proposal called for eliminating the law’s exemption which provided that no occupancy tax would be collected for facilities with three rooms or less. The resolution stated that eliminating this exemption would “…level the playing field in the Ontario County lodging industry.” The Resolution was recommended by the Ontario County Four Seasons Local Development Corporation, and the Board’s Planning and Environmental Quality Committee, and the Board’s Ways and Means Committee.
During the meeting, the proprietor of the Bella Rose Bed & Breakfast in Canandaigua spoke against the proposal. The owners of Bella Rose believe that the proposal will actually hurt smaller facilities because facilities with three or fewer rooms cannot offer the same types of common areas or amenities that are offered by larger establishments. Bella Rose’s owners believed that proposal would create a 13.5% occupancy tax. They believed assessing the same occupancy tax on smaller facilities as is paid at larger establishments would drive customers away towards the larger facilities and their larger common areas and greater amenities.
Some members of the Board were also concerned that the County had not done enough to identify all of the facilities in the County that would be impacted by the occupancy tax law change. Supervisors were particularly concerned that the law would be inconsistently applied because of the difficulty of identifying small establishments such as AirBNB style rentals. Board Chairman Jack Marren (Victor) also noted State Senator Pam Helming’s previous opposition to assessing an occupancy tax on smaller establishments.
When the vote was taken four Supervisors voted no on the Resolution. However, when the Clerk tabulated the weighted vote the four no votes were insufficient to stop passage and the Resolution was approved. The next step in the process would be that the State Legislature would have to approve the proposed changes to Section 1202-t of the New York State Tax Code.
Todd covers local government in the Finger Lakes. He has a JD degree the Lincoln Law School of Sacramento. Send tips to [email protected].