Albany lawmakers have approved a request by the City of Kingston to impose an occupancy tax on hotel rooms and other short-term accommodations. The home rule resolution which became law on Aug. 24 authorizes a bed tax of up to 3 percent, but Kingston lawmakers, who must approve the new fee, have expressed support for a lower rate.

Mayor Steve Noble announced plans for a bed tax in his October 2025 budget address and placed $100,000 in anticipated revenue from the initiative in the 2026 budget approved by the Kingston Common Council. In February, Noble appeared before the Kingston Common Council’s Finance Committee to ask for the home rule resolution. The move was part of an effort by the Noble administration to find new sources of revenue to offset property taxes, which have risen by nearly 20 percent over 2024 levels, without cutting city services.

“This is an opportunity for us to capitalize on the keen interest in Kingston and the many attractions, festivals and natural resources that we offer visitors to benefit the greater community by helping keep our city more affordable for its residents,” Noble said in a February memo to the council.

City lawmakers were initially enthusiastic about the new tax, even proposing raising it to 5 percent. But the plan drew strong pushback from some in the hospitality industry who complained that the bed tax, which would be on top of New York State’s 4 percent sales tax and another 4 percent occupancy tax imposed by the county in 2024, would make them unable to compete with businesses in neighboring towns. Operators of the Best Western on Washington Avenue were especially vocal, claiming that the tax would make them uncompetitive with similar hotels in the Town of Ulster for the lucrative business of block rentals for construction and film crews and bus tours.

In response to the pushback, the council opted to go ahead with Noble’s request for a tax of up to 3 percent, but left open the possibility of approving a lower rate once the home rule resolution was in place. Some members of the council suggested an initial tax as low as 1 percent in order to gauge the impact on the city’s hospitality sector.

With the home rule resolution in place, carried in the state legislature by state Sen. Michelle Hinchey and Assemblymember Sarahana Shrestha, the matter will now return to the Kingston Common Council for formal approval and to set the tax rate. The resolution could go before the council’s Finance Committee this month and the full council in October.