DOR: Hotel tax collections jump in July

FIVE PERCENT HOTEL TAX collections jumped nearly 25 percent in July when compared with July 2014, the state Department of Revenue reported Friday. / COURTESY R.I. DEPARTMENT OF REVENUE
FIVE PERCENT HOTEL TAX collections jumped nearly 25 percent in July when compared with July 2014, the state Department of Revenue reported Friday. / COURTESY R.I. DEPARTMENT OF REVENUE

PROVIDENCE – Hotel tax collections jumped nearly 25 percent in July when compared with July 2014, the state Department of Revenue reported Friday.

The 5 percent hotel tax is levied on the rental of lodging for less than 30 consecutive days at the state’s hotels, motels and some bed and breakfasts.

It is collected by the state Division of Taxation and disbursed through a formula to municipalities, eight regional tourism bureaus, the R.I. Convention Center Authority, the Providence Warwick Convention and Visitors Bureau and, starting July 1, the R.I. Commerce Corporation. The state of Rhode Island previously received a share of the tax revenue, but has been replaced by the Commerce Corp.

In July, collections were $2,673,857 compared with $2,141,458 during the prior-year period, the state agency said.
“As was the case for the local 1 percent hotel tax, year-over-year state 5 percent hotel tax collections are up sharply in July 2015. Although we are unable to pinpoint exactly how much of this increase might be due to the expansion of the state hotel tax base, I think that some of the impact of the base expansion is coming through in these numbers,” Acting Director of Revenue David M. Sullivan said in a statement.

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The state hotel tax base was expanded July 1 to online room resellers and the unlicensed rental of rooms via the Internet and/or social media for a period of less than one consecutive month. The report does not identify how much of the state 5 percent hotel tax collection is attributable to the expansion.

Sullivan said that the state 5 percent hotel tax generated $568,681 for the Commerce Corp., money that will be used for a state tourism promotion campaign, which he called “a high priority of the governor.”

“Given the overall level of funding for this initiative, I expect further increases in state hotel tax revenues in the future,” Sullivan said.

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