DOR: Hotel, meal and beverage tax collections increase in July

HOTEL, MEAL and beverage tax collections increased year over year in July, the state Department of Revenue said Wednesday. / COURTESY R.I. DEPARTMENT OF REVENUE
HOTEL, MEAL and beverage tax collections increased year over year in July, the state Department of Revenue said Wednesday. / COURTESY R.I. DEPARTMENT OF REVENUE

PROVIDENCE – Hotel, meal and beverage tax collections increased year over year in July, the state Department of Revenue said Wednesday.
The 1 percent hotel tax is collected on the rental of rooms in the state and remitted, in full, to the municipality in which the room was located, the DOR said.
Hotel taxes increased nearly 25 percent to $534,771 in July, compared with $428,292 in July 2014. Month over month, the increase was even greater – 50 percent, something Acting Director of Revenue David M. Sullivan called “extraordinary.”
“Even though the sharp increase in local hotel tax collections between July and June is to be expected, as July is one of the peak months of Rhode Island’s tourist season, an increase of nearly 50 percent is extraordinary. I have to believe that some of this increase is due to the expansion of the local 1 percent hotel tax base which took effect on July 1. The year-over-year change is also exceptionally strong and likely includes increased revenues from the local 1 percent hotel tax base expansion. Having said that, not all of this increase is likely due to the base expansion. It appears that Rhode Island had strong visitation numbers in July,” Sullivan said.

Effective July 1, the reselling of lodging by online travel companies, the unlicensed rental of accommodations via Internet platforms and other media, and vacation home rentals also became subject to the local 1 percent hotel tax, according to the DOR.
Meal and beverage tax collections climbed 6.3 percent to $2,596,805 in July from $2,443,108 in July 2014. From June to July, collections increased 11.2 percent, the DOR said.
Like the 1 percent hotel tax, the 1 percent meal and beverage tax is collected on the sale of a meal and/or beverage prepared away from home and the amount of tax collected is remitted in full to the municipality where the meal or beverage was consumed.
Sullivan said “local meal and beverage tax collections increased between July and June 2015 at about the same rate as they did between July and June 2014. Year-over-year growth in local 1 percent meal and beverage tax collections for July 2015 were solid, up nearly 7 percent. However, this rate of growth was down from the year-over-year rate of growth recorded in July 2014. All things considered, year-over-year growth of 6.3 percent in local 1 percent meal and beverage taxes is nothing to be disappointed about.”

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