PROVIDENCE – The 5% hotel tax generated $2.5 million in revenue for the state in September, a 2.4% year-over-year increase from the $2.4 million collected in September 2018, the R.I. Department of Revenue reported on Friday.
The DOR said the September funding was split between eight regional tourism districts ($980,710, which is 4.8% more than in September 2018), municipalities ($594,264, a 1.8% increase), R.I. Commerce Corp. ($655,977, a 0.1% decrease) and the Providence Warwick Convention and Visitors Bureau ($269,931, a 1.7% increase).
The year-over-year fluctuations in allocations are partly due to a change in revenue distribution that took effect in July, when the 5% tax collected by third-party hosting platforms such as Airbnb began to include a cut for local tourism districts. At the same time, the percentage of the allocation to the R.I. Commerce Corp. was reduced.
Meanwhile, Rhode Island’s 1% hotel tax generated $549,186 in September of this year, falling 12.5% from September 2018’s total of $627,575. Hotels collected most of the 1% tax with $477,750, a 1.9% increase year over year. Room resellers and hosting platforms brought in $22,426, a 15.2% increase from the year prior. Revenue generated by Realtors and homeowners plunged by 64.8%, totaling $49,009 in September, dropping from $139,323 the year prior.
Hotels pulled in the majority of the 5% tax, collecting about $2.4 million, a slight increase from last September’s $2.3 million, while third-party hosting platforms and room resellers brought in $112,131 in September 2019. That’s compared with $97,353 collected the year prior.
Municipalities were allocated $594,264 this September as opposed to $583,743 the previous year. Newport tallied the largest allocation of any municipality, with $184,650, a 0.3% decrease year over year. Central Falls saw the largest increase in 5% hotel tax allocations with a jump of nearly 614%, with $91,000 allocated in September 2019. The town was allocated in $13,000 the year prior.
The largest decline in allocation happened in Burrillville, which collected no money from the 5% tax, although it brought in $22,000 in September 2018.
Newport had the highest allocation of the 1% tax with $167,215 in September, a 7.6% increase from its $155,437 the year prior. Warren accounted for the largest allocation increase, tallying $86,000 in September as opposed to $2,000 the year prior. Burrillville again posted no income, a drop from its $17,000 in September 2018.
Fiscal year to date, the 5% hotel tax has generated $9.3 million, a 6.3% hike over fiscal year-to-date collections of $8.6 million in September 2018.
The 1% tax comes in at nearly $2.25 million year to date, topping fiscal year 2018’s figure of $2.1 million by 7.4%.
