Hotel, restaurant tax collections surge in May

Hotel tax collections in Rhode Island increased year over year in May for the first time since January, climbing 17.5 percent to $270,851 from $230,579 in May 2013, the R.I. Department of Revenue reported Tuesday. More

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hospitality & tourism

Hotel, restaurant tax collections surge in May

COURTESY COOK & BROWN PUBLIC HOUSE
TAX COLLECTIONS from Rhode Island hotels rose 17.5 percent in May compared with the same month a year earlier, while restaurant collections rose 6 percent, the R.I. Department of Revenue reported Tuesday.
Posted 7/29/14

PROVIDENCE – Hotel tax collections in Rhode Island increased year over year in May for the first time since January, climbing 17.5 percent to $270,851 from $230,579 in May 2013, the R.I. Department of Revenue reported Tuesday.

R.I. Director of Revenue Rosemary Booth Gallogly, however, said the year-over-year increase was overstated in the May report due to an anomaly in the May 2013 data. After adjusting for the anomaly, the year-over-year growth rate in hotel tax collections was 9.2 percent, she said.

On a month-over-month basis, hotel collections rose more significantly, increasing 63 percent over the April 2014 total of $166,093.

Meal and beverage tax collections also improved for the month of May, increasing 6 percent year over year to $2.07 million compared with $1.95 million for the same month last year. Month-over-month, meal and beverage collections increased 16.7 percent compared with $1.77 million in April.

Rhode Island’s meal and beverage tax requires all restaurants in the state to charge a 1 percent local tax on the sale of all meals and beverages. Similarly, the local hotel tax requires hotels to charge a 1 percent tax on all transactions. Tax collections represent a fair gauge of restaurant and hotel activity in Rhode Island during a given period.

Of Rhode Island’s 39 municipalities, Jamestown saw the largest percentage increase in meal and beverage collections over the year, at 41.1 percent, followed by Foster (38 percent), Little Compton (28.8 percent) and Charlestown (28.2 percent). Scituate posted the largest decline, at 52.4 percent.

Jamestown also led Rhode Island’s cities and towns for largest percentage increase in hotel collections for May, at 77.4 percent, followed by East Providence (71.5 percent) and Portsmouth (49.9 percent), while Little Compton saw the largest decrease at 92.9 percent.

As of May, fiscal year-to-date meal and beverage collections statewide totaled $20.1 million and hotel collections totaled $2.8 million, which represented a 5.2 percent increase over the same period in fiscal year 2013 for both collections.

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