- Room Tax
on Vacationers
- Chuck Carey
In 1987 the state gave towns
the right to tax visitors to the Cape 4% of their
lodging bill in addition to the 5.7 % room occupancy
tax already in place. All but one town on the Cape
took advantage and the tax increased to 9.7% of every
guest’s nightly bill. At the time the tax was
imposed, it was stated by some towns to be dedicated
to tourism related expenditures. Generally speaking,
this has not been the case.
According to figures released
by the Department of Revenue, the 9.7% tax produced
$14.9 M in calendar year 1995 and $15 M in 1996.
That means the lodging portion of tourism ( not including
meals and other sales ) produces $150,000,000 annually.
In calendar year ‘96, the state kept $8.9 M
and the 15 towns on the Cape received $6 M. Barnstable
and Yarmouth, the two most active resort towns, historically
account for 20% each of the room occupancy tax. Actual
figures from the Department of Revenue show that
both towns usually take in the range of $1.1 M each
from guests to the Cape each year. This is on top
of the $1.6 M the state takes from them. Or is it
from the hotel, motel and B+B operators ? That’s
a separate issue.
Either way, the dollars are
flowing. Most towns place it in the general fund.
Is it ending up in the right place ?
Is it right for guests to the
Cape to pay 9.7% tax in the first place ? What other
business has a tax that high ? There’s no point
to debating it - it exists.
But there is a point to debating
it’s proper destination. Isn’t it worth
considering that a world renown resort area should
spend money so kindly hand delivered ($150,000,000
annually according the State ) on tourism ? If you
just said "no" then how about at least
some trash cans at the rest area ? Maybe fix up the
beaches ?
Barnstable Town Councilor John
Boyle states that the town recently assigned $55,000
to tourism. He quotes studies which show each $1
brought here by a vacationer circulates 8 times before
it leaves the town. If this study is correct does
that mean that the $1.1 M given the town by lodging
facilities is really like $8 M passing through the
hands of Cape Codders ? Councilor Boyle says he believes
it’s wise to reinvest such tourist dollars in
tourism related items which help small business and
create jobs.
A recent study published by
the Cape Codder states that of the $6 M dollars
the 15 towns took from the pockets of tourists, $278,000
was distributed back to tourism. That’s 5%.
Dennis, Truro and Eastham gave nothing back.
The pittance that did trickle
into tourism related items usually went to the Chambers
of Commerce in the respective towns. The towns which
do reinvest claim growth in tourism in such areas
as shoulder season festivals, etc. perhaps bringing
dollars which may not have come otherwise. The reinvestment
of room tax dollars will increase the income to the
towns and give relief to the general tax burden.
Aside from being smart, it’s
fair.
