Kingston Common Council to vote on proposed 3% occupancy tax

The Kingston Common Council is scheduled to vote on Tuesday on a proposal to implement a 3% occupancy tax on motel, hotel, and short-term rental stays, according to a report by the Daily Freeman. The legislative action represents the final local step required to enact the tax, which has already cleared state-level hurdles.

Kingston Mayor Steve Noble has estimated that the new 3% tax could generate between $100,000 and $400,000 in revenue for the city in 2027. The proposal comes as Kingston faces budget pressures on multiple fronts, with the city preparing to raise taxes for the third straight year. The revenue from the occupancy tax is intended to help offset the city’s dependency on property and sales taxes.

What the data shows

The proposed local tax structure would introduce a 3% city occupancy tax on top of existing levies. According to Mayor Steve Noble, guests staying in Kingston lodging establishments currently pay an 8% state sales tax and a 4% Ulster County occupancy tax. If the Common Council approves the new measure, the total tax rate for overnight visitors will include all of these components: the 8% state sales tax, the 4% county tax, and the 3% city tax. This new city tax would be assessed directly on guests rather than on the operators of the lodging establishments.

Mayor Noble has stated that even with the addition of the 3% city tax, the overall fee structure for lodging in Kingston would remain below that of other larger cities in New York State. The mayor specifically cited Newburgh, Yonkers, Utica, Syracuse, and Buffalo as municipal jurisdictions with higher lodging tax structures.

The inventory of lodging accommodations in Kingston consists of approximately 450 hotel rooms and 106 full-time short-term rentals, as reported by Mayor Noble. The projected revenue of $100,000 to $400,000 for the year 2027 is based on these existing lodging options, though city officials have cautioned that actual collections may vary widely depending on market conditions.

The proposal reached the full Common Council after the council’s Finance and Audit Committee voted 4-1 to forward the measure. Teryl Mickens, D-Ward 5, cast the sole no vote on the committee, expressing opposition to the measure.

How it was measured

The figures regarding Kingston’s lodging inventory and projected tax revenues were compiled and presented by Mayor Steve Noble during a presentation to the Common Council in September. The primary source did not disclose the specific methodology, data sources, or software used by city officials to identify and count the 106 full-time short-term rentals or the 450 hotel rooms within the city limits.

The revenue projection of $100,000 to $400,000 for 2027 is an estimate subject to multiple market variables. Mayor Noble noted that lodging prices in the city experience significant fluctuations depending on the day of the week and the season. As an example of these price dynamics, the mayor pointed out that a lodging stay on a Tuesday night in the winter season costs far less than a night booked during the autumn leaf-peeping season, which attracts higher visitor volume and higher room rates.

The legislative timeline

The proposal for a 3% occupancy tax is the result of a multi-year legislative process. Mayor Noble first proposed the tax in October 2025 during his presentation of the 2026 budget proposal. Because municipal occupancy taxes in New York require state-level authorization, the city had to submit a home rule request to the state government.

According to Mayor Noble’s September presentation to the council, the state Assembly and the state Senate have both approved the required home rule request. Governor Kathy Hochul has also signed off on the state legislation. With state authorization secured, the vote by the Kingston Common Council on Tuesday represents the final legislative approval needed to establish the tax.

If the Common Council approves the proposal on Tuesday, the tax will not take effect immediately. A second reading of the local law will be required in November. City officials indicate that the occupancy tax will not go into effect until at least late this year.

Market drivers and revenue volatility

The primary driver of the projected occupancy tax revenue is the seasonal demand for lodging in the Hudson Valley region. During peak travel periods, such as the autumn foliage season, higher occupancy rates and increased average daily rates for both the 450 hotel rooms and the 106 full-time short-term rentals would generate higher tax yields per night. Conversely, during off-peak periods, such as weekdays in winter, lower demand and reduced room pricing will depress nightly tax collections.

The total revenue collected by the city will also depend on compliance and enforcement. Because the tax is assessed on guests and collected by operators, the city’s administrative capacity to track bookings and collect the 3% fee from various platforms and individual hosts will influence whether final revenues reach the projected range of $100,000 to $400,000 in 2027.

Who the tax affects

The proposed tax directly affects overnight visitors to Kingston, who will see a 3% charge added to their lodging bills. This charge is separate from the existing 8% state sales tax and the 4% county occupancy tax, meaning guests will face a combined tax rate on their stays.

While the tax is levied on guests rather than lodging operators, local business owners and industry representatives have raised concerns about its indirect impacts. Teryl Mickens, the Ward 5 Democrat who voted against the proposal in committee, questioned why the lodging industry is being targeted by lawmakers. Mickens echoed concerns raised by lodging operators and Ulster Strong, a local business advocacy group. A primary concern is that the additional tax could discourage visitors from staying within Kingston city limits, potentially prompting them to book accommodations in neighboring municipalities, such as the town of Ulster, which do not have the city tax.

Other members of the Common Council have downplayed these concerns, expressing skepticism that a 3% tax would deter tourists or business travelers from staying in Kingston lodging establishments. If the tax is approved and generates excess revenue beyond what is budgeted annually, Mayor Noble suggested in September that the city could establish a dedicated fund. This fund would use the surplus revenues to finance improvements in local business districts and support the specific areas where lodging accommodations are located. Proposed projects under this fund could include streetscape improvements and tree plantings.

For the city government, the tax affects municipal finance by providing a new revenue stream. This revenue is intended to alleviate the city’s reliance on property and sales taxes at a time when Kingston is facing its third straight year of tax increases due to escalating budget pressures.

What to watch

In the coming weeks, short-term rental hosts, hotel operators, and local investors should monitor several key developments to prepare for potential regulatory changes.

• The vote by the full Kingston Common Council on Tuesday to determine if the 3% occupancy tax proposal is approved.
• The introduction and second reading of the local law in November, which is required for final enactment.
• The publication of administrative guidelines by the city detailing how short-term rental hosts must collect, report, and remit the 3% tax.
• The release of Kingston's final budget details to see how the projected 2027 revenues are integrated into municipal financial planning.
• Any shifts in booking patterns or pricing strategies among lodging operators in the town of Ulster and other neighboring municipalities.