Providence, R.I -- The Rhode Island Department of Revenue today released its FY 2017 State 5.0 Percent Hotel Tax Collections Report for December 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 December 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). The state 5.0 percent hotel tax collections from these rentals covers July through September 2016 inclusive for all municipalities except the City of Newport which failed to provide the data requested by the Office of Revenue Analysis for this period. 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 through December 2015 and the months of October through December 2016 while the Division of Taxation was able to provide data on an aggregated basis, rather than a monthly basis, for the months of July through December 2015 but was unable to provide similar data for the months of October through December 2016 for all other municipalities in the state.
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 December 2016 Report The findings of the December 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 7.2 percent, equal to the 7.2 percent year-over-year growth rate reported in November 2016; o December 2016 state hotel tax collections include $4,058 of receipts from room rentals via hosting platforms and on-line travel companies compared to $2,944 in December 2015; • All regional tourism districts received more in state 5.0 percent hotel tax collections in December 2016 than in December 2015 due in no small part to the fact that the share of state 5.0 percent hotel tax revenue increased to 47 percent in December 2016 from 42 percent in December 2015; o The regional tourism districts received $1,347 in revenues from the expansion of the state hotel tax base to room resellers and hosting platforms in December 2016 versus $1,237 in December 2015; • Rhode Island Commerce Corporation (RICC) received $22,266 less year-over-year in state hotel tax revenue than it received in December 2015 as its share of the state 5.0 hotel tax shrank from 28 percent in December 2015 to 21 percent in December 2016; o RICC collected $1,496 in December 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 $824 in December 2015.
* December 2016 total state hotel tax collections include $4,058 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $1,347; municipalities, $1,014; Rhode Island Commerce Corporation, $1,496; and Providence Warwick Convention & Visitors Bureau, $201. † December 2015 total state hotel tax collections include $2,944 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $1,237; municipalities, $736; Rhode Island Commerce Corporation, $824; and Providence Warwick Convention & Visitors Bureau, $147.
The findings of the December 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 fell to 3.3 percent, a decrease from the 4.0 percent growth recorded in the November 2016 report; o Fiscal year-to-date through December 2016 state hotel tax collections include $131,533 of receipts from room rentals via hosting platforms and on-line travel companies vs. $157,189 in fiscal year-to-date through December 2015; • All tourism districts, other than Northern Rhode Island and the Warwick Department of Economic Development received more state 5.0 percent hotel tax collections in FY 2017 through December than in FY 2016 through December; o The regional tourism districts received $48,072 in increased revenues from the expansion of the state hotel tax base to room resellers and hosting platforms in FY 2017 through December versus $65,235 for the same period last year; • Rhode Island Commerce Corporation (RICC) received $209,664 more in FY 2017 through December 2016 than it received for the same period in FY 2016; o RICC collected $32,576 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 December compared to $33,216 in FY 2016 through December.
* FY 2017 YTD total state hotel tax collections include $131,533 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $48,072; municipalities, $18,139; Rhode Island Commerce Corporation, $32,576; and Providence Warwick Convention & Visitors Bureau, $18,002. † FY 2016 YTD total state hotel tax collections include $157,189 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts, $65,235; municipalities, $26,021; Rhode Island Commerce Corporation, $33,216; and Providence Warwick Convention & Visitors Bureau, $19,441.
The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2017.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.