Hotel tax collections for April reflect ‘cause for some concern’

The state of Rhode Island collected $830,464 in April under its 5 percent hotel tax, a decline of $114,299 or 12.1 percent from the $944,763 collected a year earlier in April 2013, according to the R.I. Department of Revenue. More

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hospitality & tourism

Hotel tax collections for April reflect ‘cause for some concern’

Posted 7/1/14

PROVIDENCE – The state of Rhode Island collected $830,464 in April under its 5 percent hotel tax, a decline of $114,299 or 12.1 percent from the $944,763 collected a year earlier in April 2013, according to the R.I. Department of Revenue.

The state hotel tax requires hotels to charge a 5 percent tax on the rental of rooms in the state and, together with the separately levied 1 percent local hotel tax, represents a fair gauge of hotel activity in Rhode Island during a given period.

The Revenue Department noted in the April report, released Tuesday, that an anomaly in the April 2013 data skewed the year-over-year growth rate in hotel tax collections. After correcting for the anomaly, collections fell 3.1 percent year over year rather than 12.1 percent.

Nevertheless, Revenue Director Rosemary Booth Gallogly said, “State hotel tax collections have slumped on a year-over-year basis for April and are a cause for some concern that the business travel market and the consumer tourism market are slowing as the peak summer travel season approaches.”

Fiscal year-to-date data for hotel tax collections drew a more positive picture of the industry’s health. Through April, fiscal year-to-date state hotel tax collections totaled $12.7 million and a 4 percent increase over the same period in fiscal year 2013, respectively.

Tax revenue from the state hotel tax is divided among regional tourism districts, the Providence Warwick Convention & Visitors Bureau, the R.I. Convention Center Authority, and the state and its 39 municipalities.

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