February 3, 2017 Providence, R.I. -- The Rhode Island Department of Revenue today released its FY 2017 State 5.0 Percent Hotel Tax Collections Report for August 2016. The State 5.0 Percent Hotel Tax Allocation Report, which is issued on a monthly basis, compares the collections from the state's 5.0 percent hotel tax on a year-over-year, and fiscal year-to-date over fiscal year-to-date basis. The state 5.0 percent hotel tax is collected on the rental of rooms in the state and distributed based on the formula contained in Rhode Island General Law Chapter 44-63.1 entitled "Tourism and Development."
Expansion of the State 5.0 Percent Hotel Tax Base The August 2016 report includes the state 5.0 percent hotel tax collections generated by the rental of lodging via hosting platforms and by on-line travel companies (room resellers) for all municipalities. The state 5.0 percent hotel tax collections from these rentals covers July and August 2016 inclusive for all municipalities except the City of Newport which failed to provide the data requested by the Office of Revenue Analysis. It should be noted the City of Newport did provide data on the state 5.0 percent hotel tax derived from hosting platforms and room resellers for July and August 2015 while the Division of Taxation was unable to provide similar data for this month for all other municipalities in the state.
It should be noted that due to timing and capacity constraints not all state 5.0 percent hotel tax returns filed in September for August 2016 were processed in the month. Certain August 2016 returns filed by room resellers and hosting platforms for the rental of single rooms and realtors and homeowners for the rental of entire housing units will be reported in September 2016 along with September returns. As a result, the revenue from the rental of lodging in August 2016 is likely understated.
Changes in the Distribution of the State 5.0 Percent Hotel Tax Revenues Rhode Island General Law 42-63.1-3(b) titled "Tourism and Development – Distribution of tax" provides that for state hotel tax returns and payments received after December 31, 2015 the distribution of state hotel tax revenues would follow the new formula enacted into law by the General Assembly in the 2015 session. The state hotel tax revenue from December 2015 through May 2016 hotel room rental activity was received after January 1, 2016 and thus the new formula applies to the FY 2016 December through May revenue collections contained in this report.
In the 2016 Session, the General Assembly changed the state 5.0 percent hotel tax distribution formula to revert back to the formula that was in place prior to January 1, 2016 for returns and payments received after June 30, 2016. The state hotel tax revenue from July and August 2016 hotel room rental activity was received after June 30, 2016 and thus the new "old" distribution formula applies to the FY 2016 June and FY 2017 July and August revenue collections contained in this report.
In general, the formula for the distribution of state hotel tax revenues to the various recipients for returns and payments received is as follows: • Regional tourism districts: Prior to January 1, 2016, 47 percent; After December 31, 2015 and prior to July 1, 2016, 42 percent; After June 30, 2016, 47 percent; • The Convention Authority of Providence and the Warwick Department of Economic Development shares from hotels located in each respective city, except the Omni Providence Hotel: Prior to January 1, 2016, 31 percent; After December 31, 2015 and prior to July 1, 2016, 28 percent; After June 30, 2016, 31 percent; • The Providence Warwick Convention & Visitors Bureau's share from hotels located outside of Providence and Warwick: Prior to January 1, 2016, seven percent; After December 31, 2015 and prior to July 1, 2016, five percent; After June 30, 2016, seven percent; • The Rhode Island Convention Center Authority's share from the Omni Providence Hotel: Prior to January 1, 2016, 30 percent; After December 31, 2015, zero percent; • The Rhode Island Commerce Corporation's share from hotels located outside of Providence and Warwick: Prior to January 1, 2016, 21 percent; After December 31, 2015 and prior to July 1, 2016, 28 percent; After June 30, 2016, 21 percent; • The Rhode Island Commerce Corporation's share from hotels located in Providence and Warwick, except the Omni Providence Hotel: Prior to January 1, 2016, 21 percent; After December 31, 2015 and prior to July 1, 2016, 24 percent; After June 30, 2016, 21 percent; and • The Rhode Island Commerce Corporation's share from the Omni Providence Hotel: Prior to January 1, 2016, 27 percent; After December 31, 2015, 60 percent.
Results of the August 2016 Report The findings of the August 2016 State 5.0 Percent Hotel Tax Collections Report on a year-over-year basis are: • Year-over-year growth in state hotel tax receipts was 7.0 percent, above the 4.9 percent year-over-year increase reported in August 2015; o August 2016 state hotel tax collections include $1,848 of receipts from room rentals via hosting platforms and on-line travel companies compared to $9,240 in August 2015; • All tourism districts, other than Northern Rhode Island received more state 5.0 percent hotel tax collections in August 2016 than in August 2015; o The regional tourism districts received $869 in increased revenues from the expansion of the state hotel tax base to room resellers and hosting platforms versus $4,343 in August 2015; • Rhode Island Commerce Corporation (RICC) received $70,693 more year-over-year in state hotel tax revenue than it received in August 2015; o RICC collected $388 in August 2016 in state hotel taxes from the assessment of the state 5.0 percent hotel tax on room rentals via hosting platforms and by room resellers compared to $1,940 in August 2015.
The findings of the August 2016 State 5.0 Percent Hotel Tax Collections Report on a fiscal year-to-date over fiscal year-to-date basis are: • Fiscal year-to-date over fiscal year-to-date growth in state hotel tax receipts increased to 3.4 percent, an increase from the 0.0 percent growth recorded in the July 2016 report; o Fiscal year-to-date through August 2016 state hotel tax collections include $48,246 of receipts from room rentals via hosting platforms and on-line travel companies vs. $35,515 in fiscal year-to-date through August 2015; • All tourism districts, other than Northern Rhode Island and Aquidneck Island received more state 5.0 percent hotel tax collections in FY 2017 through August than in FY 2016 through August; o The regional tourism districts received $19,326 in increased revenues from the expansion of the state hotel tax base to room resellers and hosting platforms versus $16,692 for same period last year; • Rhode Island Commerce Corporation (RICC) received $101,585 more in FY 2017 through August 2016 than it received for the same period in FY 2016; o RICC collected $10,132 in state hotel taxes from the assessment of the state 5.0 percent hotel tax on room rentals via hosting platforms and by room resellers in FY 2017 through August compared to $7,458 in FY 2016 through August;
• August 2016 total state hotel tax collections include $1,848 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $869; municipalities, $462; Rhode Island Commerce Corporation, $388; and Providence Warwick Convention & Visitors Bureau, $129.
• August 2015 total state hotel tax collections include $9,240 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $4,343; municipalities, $2,310; Rhode Island Commerce Corporation, $1,940; and Providence Warwick Convention & Visitors Bureau, $647.
• FY 2017 YTD total state hotel tax collections include $48,246 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $19,326; municipalities, $6,828; Rhode Island Commerce Corporation, $10,132; and Providence Warwick Convention & Visitors Bureau, $6,727.
• FY 2016 YTD total state hotel tax collections include $35,515 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $16,692; municipalities, $8,879; Rhode Island Commerce Corporation, $7,458; and Providence Warwick Convention & Visitors Bureau, $2,486.
The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2016.php under the State Reports tab. The full report includes the break down by regional tourism district and municipality of state hotel tax collection distributions on a year-over-year and fiscal year-to-date over fiscal year-to-date basis.
Questions or comments on the report should be directed to Paul Grimaldi, Chief of Information and Public Relations by e-mail at paul.grimaldi@revenue.ri.gov or by phone at (401) 574-8766.