PROVIDENCE – The R.I. Revenue Department collected $1.4 million in May through the state’s 5 percent hotel tax, a sum 17.5 percent higher than the $1.2 million collected a year earlier in May 2013, according to the latest revenue report.
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 May report that an anomaly in the May 2013 data skewed the year-over-year growth rate in hotel tax collections. After correcting for the anomaly, collections rose 9.2 percent year over year rather than 17.5 percent.
Revenue Director Rosemary Booth Gallogly said the May collections are “cause for some optimism that the business travel market and the consumer tourism market are bouncing back after pausing during April,” a welcome development at the start of the peak summer season.
Hotel tax collections also improved on a fiscal year-to-date basis, rising 5.2 percent during the five months through May, or 4.5 percent after adjusting for the May 2013 data anomaly. Year-to-date collections totaled $14 million in May, compared with $13.3 million for the same period last fiscal year.
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.