R.I. hotel tax collections rise 4.1% in Jan., restaurant collections fall
TAX COLLECTIONS from Rhode Island restaurants dropped six-tenths of a percent in January compared with the same month a year earlier, while hotel collections rose 4.1 percent, the R.I. Department of Revenue reported Tuesday.
PROVIDENCE – Hotel tax collections rose to $138,139 in January, an increase of 4.1 percent compared with the $132,707 collected during January 2013, the R.I. Department of Revenue reported Tuesday.
On a month-over-month basis, tax collections on local hotels increased 1 percent, from $136,800 in December 2013 to $138,139 in January.
The increase in hotel tax revenue during the winter season reflects strength in Rhode Island’s tourism sector, said R.I. Director of Revenue Rosemary Booth Gallogly. The same could not be said for the restaurant industry reflected in the month’s meals and beverage tax report, however.
Meals and beverage tax collections in January dropped by six-tenths of a percent year over year, from $1.51 million to $1.5 million. In addition, collections dropped by 8.7 percent month over month, from $1.6 million in December 2013, Gallogly said. She attributed the drop to the “post-holiday” period.
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.
On a fiscal year-to-date basis, meal and beverage tax collections rose 5.6 percent from $12.4 million in January 2013 to $13.1 million in January 2014. However, the year-to-date data may contain some anomalies due to a delay in correcting a reporting error from June of last year, Gallogly said.
The five communities with the largest dollar-amount increase in meal and beverage tax collections for the fiscal year were Warwick, with an increase of $119,690; Providence, with $115,731; Cranston, with $59,295; Lincoln, with $47,446; and Smithfield, with $41,902.
The municipalities that posted the largest decreases in fiscal year-to-date collections were North Providence, with a $22,612 decline; Newport, $18,552; Woonsocket, $11,513; Burrellville, $6,346; and North Kingstown, $5,889.
For the fiscal year, hotel tax collections increased 5.7 percent, from $1.97 million in December 2013 to $2.08 million in January.
Providence led Rhode Island’s cities and towns for largest dollar-amount increase in hotel collections for the fiscal year to date, with collections there rising by $23,042. Newport ($20,417), Westerly ($19,971) and Middletown ($16,394) also posted large collections gains, while Woonsocket reported its hotel tax revenue declined by $4,942.