NY hotels initially avoided paying $8.9 million in taxes

The New York Daily News reports that the Bloomberg administration initially failed to collect $8.9 in taxes from 92 hotels and hostels over the last decade.

Among the 92 hotels was the chic Bowery Grand Hotel, which had about $493,000 in taxes that were not initially paid, the Daily News says. No other hotels were cited in the report.

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The cash-strapped city has since collected most of the money, but city Controller John Liu highlighted the situation in a new audit as New York's experiences an unusual hotel building boom.

Mayor Michael Bloomberg recently held a press conference to tout the opening of a record numer of hotel rooms throughout the city. The building boom includes Long Island City, where there are now 17 hotels including a Holiday Inn. Next month, the Wyndham Garden Long Island City will open there.

Regarding taxes, Liu in a statement says that tourism and business travel so critical to New York City's economy and so "the Department of Finance is selling us short if this badly needed revenue is not collected." The $8.9 million figure doesn't include fines or interest, the Daily News says.

At this point, virtually all of the hotel tax revenue owed has been collected and the Finance Department promises to collect the rest, the article says.

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"Businesses that do not pay their obligations put the screws to everyone," Finance Department spokesman Owen Stone told the paper.

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The audit revealed the problem: Hotels are allowed to voluntarily register with the city when they open their doors, but 64 hotels and 20 hostels and bed-and-breakfasts never did, the Daily News says. Another eight were caught underreporting.

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