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R.I. Department of Revenue releases January 2016 hotel tax report

(Providence, RI), The Rhode Island Department of Revenue released its FY 2016 State 5.0 Percent Hotel Tax Collections Report for January 2016 today. 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."

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 and January 2016 hotel room rental activity was received after January 1, 2016 and thus the new formula applies to the FY 2016 December and January revenue collections contained in this report. In general, the new formula changes the share of state hotel tax revenues allocated to the various recipients as follows: Regional tourism districts' share decreases from 47 percent to 42 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, decrease from 31 percent to 28 percent; The Providence Warwick Convention & Visitors Bureau's share from hotels located outside of Providence and Warwick, except the Omni Providence Hotel decreases from seven percent to five percent; The Rhode Island Convention Center Authority's share from the Omni Providence Hotel decreases from 30 percent to zero percent; The Rhode Island Commerce Corporation's share from hotels located outside of Providence and Warwick increases from 21 percent to 28 percent; its share from hotels located in Providence and Warwick, except the Omni Providence Hotel, increases from 21 percent to 24 percent; and its share from Omni Providence Hotel increase from 27 percent to 60 percent.

The findings of the January 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 were down slightly at 0.3 percent; All of the regional tourism districts incurred a year-over-year decline in their share of state hotel tax revenue in part due to the change in the allocation formula; Rhode Island Commerce Corporation received $47,634 more year-over-year in state hotel tax revenue than was deposited as state general revenues for January 2015. The findings of the January 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 remain strong at 10.9 percent, a slight decline from the December 2015 report; Rhode Island Commerce Corporation's share of state hotel taxes were $353,613 more on a fiscal year-to-date basis for FY 2016 than the amount deposited as state general revenues for the same period in FY 2015; Rhode Island Convention Center Authority's share of state hotel tax revenues will not change on a fiscal year-to-date basis in FY 2016 through January and going forward. 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.

Expansion of the Local Hotel Tax Base to Vacation Rentals and Hosting Platforms The January 2016 report may include state 5.0 percent hotel tax receipts generated from the expansion of the state hotel tax base to include the reselling of lodging by online travel companies and the unlicensed rental of accommodations via internet platforms and other media. It should be noted that state hotel tax receipts received from the unlicensed rental of accommodations via internet platforms and other media are divided between the municipality where the rental occurred (25 percent) and the Rhode Island Commerce Corporation (75 percent) only. At this time, the Office of Revenue Analysis is unable to determine the amount collected from each of these state 5.0 percent hotel tax base expansions and thus an unknown amount of receipts from these expansions may be included in this report. In addition, the FY 2016 state 5.0 percent hotel tax reports reallocate the general fund and the statewide tourism district's shares of the state 5.0 percent hotel tax to the Rhode Island Commerce Corporation. These transfers are reflected in the detail tables of the report.

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