FY 2017 State 5.0 Percent Hotel Tax Allocation Report May 2017

August 24, 2017 Providence, R.I. — The Rhode Island Department of Revenue today
released its FY 2017 State 5.0 Percent Hotel Tax Collections Report for May 2017.
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 May 2017 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 and April through May 2017 on a monthly basis and
October 2016 through January 2017 and February through March 2017 on a cumulative
basis for all municipalities except the City of Newport which failed to provide the
data requested by the Office of Revenue Analysis for the July 2016 through September
2016 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
2015 through May 2016 and the months of October 2016 through May 2017 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.

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 May 2017 Report
The findings of the May 2017 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 ‑12.0 percent, a
complete reversal from the 9.3 percent year-over-year growth rate reported in
April 2017;
* May 2017 state hotel tax collections include $47,871 of receipts from room
rentals via hosting platforms and on-line travel companies distributed in July
2017 compared to $16,519 in May 2016;
* Only four regional tourism districts received more in state 5.0 percent hotel
tax collections in May 2017 than in May 2016 in spite of the fact that the share
of state 5.0 percent hotel tax revenue increased to 47 percent in May 2017 from 42
percent in May 2016;
* The regional tourism districts received $8,722 in revenues from the
expansion of the state hotel tax base to room resellers and hosting platforms
in May 2017 versus $6,938 in May 2016;
* Rhode Island Commerce Corporation (RICC) received $185,868 less year-over-year
in state hotel tax revenue than it received in May 2016 as its share of the state
5.0 hotel tax shrank from 28 percent in May 2016 to 21 percent in May 2017;
* RICC collected $24,129 in May 2017 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 $4,625 in May 2016.
The year-over-year state hotel tax revenue allocation is summarized in Table 1 below:
1. May 2017 Year-over-Year Summary of Findings:
Recipient of Hotel Tax

May 2017 *

May 2016 †

Nominal Difference

Percentage Difference

Regional Tourism Districts

$ 707,922

$ 748,668

$ (40,747)

‑5.4 %

Municipalities

425,151

459,056

(33,905)

‑7.4 %

Rhode Island Commerce Corp.

446,425

632,292

(185,868)

‑29.4 %

Providence Warwick Convention & Visitors Bureau

246,478

235,805

10,673

4.5 %

RI Convention Center Authority

0

0

0

n/a

Total

$ 1,825,975

$ 2,075,821

$ (249,846)

‑12.0 %

* May 2017 total state hotel tax collections include $47,871 in revenues from the
expansion of the state hotel tax base broken down as follows: regional tourism
districts, $8,722; municipalities, $11,967; Rhode Island Commerce Corporation,
$24,129; and Providence Warwick Convention & Visitors Bureau, $3,053.
† May 2016 total state hotel tax collections include $16,519 in revenues from the
expansion of the state hotel tax base broken down as follows: regional tourism
districts, $6,938; municipalities, $4,130; Rhode Island Commerce Corporation,
$4,625; and Providence Warwick Convention & Visitors Bureau, $826.

The findings of the May 2017 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 was 1.0 percent, above the 2.8 percent growth recorded in the April 2017
report;
* Fiscal year-to-date through May 2017 state hotel tax collections include
$366,127 of receipts from room rentals via hosting platforms and on-line travel
companies vs. $208,870 in fiscal year-to-date through May 2016;
* All tourism districts, other than Northern Rhode Island received more state
5.0 percent hotel tax collections in FY 2017 through May than in FY 2016 through
May;
* The regional tourism districts received $93,349 in increased revenues from
the expansion of the state hotel tax base to room resellers and hosting
platforms in FY 2017 through May versus $86,941 for the same period last year;
* Rhode Island Commerce Corporation (RICC) received $84,354 less in FY 2017
through May than it received for the same period in FY 2016;
* RICC collected $146,650 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 May compared to $47,686 in FY 2016 through May.
The fiscal year-to-date over fiscal year-to-date state hotel tax revenue allocation
is summarized in Table 2 below:
2. May 2017 Fiscal Year-to-Date over Fiscal Year-to-Date Summary of Findings:
Recipient of Hotel Tax

FY 2017 * Year-to-Date

FY 2016 † Year-to-Date

Nominal Difference

Percentage Difference

Regional Tourism Districts

$ 6,993,498

$ 6,741,545

$ 251,953

3.7 %

Municipalities

4,107,740

4,020,406

87,334

2.2 %

Rhode Island Commerce Corp.

4,104,471

4,188,825

(84,354)

‑2.0 %

Providence Warwick Convention & Visitors Bureau

2,198,885

2,112,214

86,670

4.1 %

RI Convention Center Authority

0

165,897

(165,897)

‑100.0 %

Total

$ 17,404,593

$ 17,228,888

$ 175,705

1.0 %

* FY 2017 YTD total state hotel tax collections include $366,127 in revenues from
the expansion of the state hotel tax base broken down as follows: regional tourism
districts, $93,349; municipalities, $91,548; Rhode Island Commerce Corporation,
$146,650; and Providence Warwick Convention & Visitors Bureau, $34,579.
† FY 2016 YTD total state hotel tax collections include $208,870 in revenues from
the expansion of the state hotel tax base broken down as follows: regional tourism
districts, $86,941; municipalities, $52,217; Rhode Island Commerce Corporation,
$47,686; and Providence Warwick Convention & Visitors Bureau, $22,025.

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.