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R.I. Department of Revenue releases June 2018 state hotel tax report

Providence, R.I. -- The Rhode Island Department of Revenue today released its FY 2018 State 5.0 Percent Hotel Tax Collections Report for June 2018. 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 June 2018 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, except the City of Newport for the period of July through September 2016. The City of Newport did not provide a breakdown of state 5.0 percent hotel tax collections for hosting platforms and room resellers for July through September 2016 but has provided this data for all other time periods covered in this report.

Changes in the Distribution of the State 5.0 Percent Hotel Tax Revenues Rhode Island General Laws Chapter 42-63.1 titled "Tourism and Development" provides that for state hotel tax returns and payments received after June 30, 2016 but prior to July 1, 2017 the distribution of state hotel tax revenues will be as provided for in Rhode Island General Law Section 42-63.1-3(a). For state hotel tax returns and payments received after June 30, 2017 and prior to July 1, 2018, the distribution of state hotel tax revenues will be as provided for in Rhode Island General Laws Section 42-63.1-3(b). The 2018 General Assembly amended the distribution formula again so that for state hotel tax returns and payments received after June 30, 2018, the distribution of state hotel tax revenues will be as indicated in Rhode Island General Laws Section 42-63.1-3(f).

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: after June 30, 2016 and prior to July 1, 2017, 47 percent; after June 30, 2017 and prior to July 1, 2018, 42 percent; after June 30, 2018, 45 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: after June 30, 2016 and prior to July 1, 2017, 31 percent; after June 30, 2017 and prior to July 1, 2018, 28 percent; after June 30, 2018, 30 percent. The Providence Warwick Convention & Visitors Bureau's (PWCVB) share from hotels located outside of Providence and Warwick: after June 30, 2016 and prior to July 1, 2017, seven percent; after June 30, 2017, five percent. PWCVB's share from hotels located in Providence and Warwick, except the Omni Providence Hotel: after June 30, 2016 and prior to July 1, 2018, 23 percent; after June 30, 2018, 24 percent. PWCVB's share from the Omni Providence Hotel: after June 30, 2016 and prior to July 1, 2018, 12 percent; after June 30, 2018, 20 percent. The Rhode Island Commerce Corporation's (CommerceRI) share from hotels located outside of Providence and Warwick: after June 30, 2016 and prior to July 1, 2017, 21 percent; after June 30, 2017 and prior to July 1, 2018, 28 percent; after June 30, 2018, 25 percent. CommerceRI's share from hotels located in Providence and Warwick, except the Omni Providence Hotel: after June 30, 2016 and prior to July 1, 2017, 21 percent; after June 30, 2017 and prior to July 1, 2018, 24 percent; after June 30, 2018, 21 percent. CommerceRI's share from the Omni Providence Hotel: after June 30, 2016 and prior to July 1, 2018, 60 percent; after June 30, 2018, 50 percent.

Year-Over-Year Results of the June 2018 Report The findings of the June 2018 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 14.7 percent, more than double the 6.8 percent year-over-year variance reported for June 2017; o June 2018 state hotel tax collections include $83,192 of receipts from room rentals via hosting platforms and on-line travel companies vs. $22,723 reported in June 2017; All tourism districts received more in state 5.0 percent hotel tax collections for June 2018 than for June 2017, likely due in part to the change in the state hotel tax distribution formula enacted by the General Assembly at the end of the 2018 legislative session; o The regional tourism districts received $12,266 in revenues from the expansion of the state hotel tax base to room resellers and hosting platforms for June 2018 vs. $2,262 received in June 2017. CommerceRI received $23,985 more year-over-year in state hotel tax revenue in June 2018 than in June 2017; o CommerceRI collected $45,588 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 vs. $13,566 in June 2017.

^ June 2018 total state hotel tax collections include $83,194 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts: $12,266; Municipalities, $20,798; Rhode Island Commerce Corporation, $45,588; and Providence Warwick Convention & Visitors Bureau, $4,542. * June 2017 total state hotel tax collections include $22,723 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts: $2,262; Municipalities, $5,704; Rhode Island Commerce Corporation, $13,566; and Providence Warwick Convention & Visitors Bureau, $1,191.

Fiscal Year-to-Date-Over-Fiscal Year-To-Date Results of the June 2018 Report The findings of the June 2018 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 through June growth in state hotel tax receipts was 9.9 percent, sharply higher than the 1.2 percent growth rate reported for the same period in FY 2017; o FY 2018 through June state hotel tax collections include $645,394 of receipts from room rentals via hosting platforms and on-line travel companies vs. $388,850 collected for FY 2017 through June; All tourism districts, other than Aquidneck Island, the Convention Authority of Providence, Northern Rhode Island, and the Statewide district received less in state 5.0 percent hotel tax collections for FY 2018 through June than for FY 2017 through June; o The regional tourism districts received $116,304 in revenues from the expansion of the state hotel tax base to room resellers and hosting platforms for year-to-date FY 2018 vs. $95,611 received for year-to-date FY 2017. The fiscal year-to-date through June 2017 figure does not include any revenues generated from these sources in the City of Newport for July through September 2016; CommerceRI received $1.5 million more fiscal year-to-date over fiscal year-to-date in state hotel tax revenue for FY 2018 than for FY 2017; o CommerceRI collected $325,457 in year-to-date FY 2018 state hotel taxes from the assessment of the state 5.0 percent hotel tax on room rentals via hosting platforms and by room resellers vs. $160,217 for year-to-date FY 2017. The fiscal year-to-date-over-fiscal year-to-date state hotel tax revenue allocation is summarized in Table 2 below:

^ FY 2018 year-to-date total state hotel tax collections include $645,394 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts: $116,304; Municipalities, $161,420; Rhode Island Commerce Corporation, $325,457; and Providence Warwick Convention & Visitors Bureau, $42,213. * FY 2017 year-to-date total state hotel tax collections include $388,850 in revenues from the expansion of the state hotel tax base broken down as follows: regional tourism districts: $95,611; Municipalities, $97,252; Rhode Island Commerce Corporation, $160,217; and Providence Warwick Convention & Visitors Bureau, $35,770.

The entire report can be found on the Department of Revenue's web site at http://www.dor.ri.gov/revenue-analysis/2018.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.

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