PDF: Municipal Accommodation Tax
Prior to the 1960s, tourism-specific taxes did not exist. However, worldwide there are now over forty different types of taxes levied on tourism. Accommodation taxes, also commonly known in other jurisdiction as “hotel taxes”, “lodging tax” and/or “tourist tax”, have grown in popularity stemming “from the widely held perception that its burden is largely borne by tourists rather than residents, with little negative impact on industry sales”. Canada has been slower to adopt accommodation taxes than other jurisdictions like the United States and Europe, which have imposed these types of taxes for a longer period of time.
On Thursday November 23, 2017, the Province of Ontario issued the Transient Accommodation Regulation 435/17, (Regulation) which came into force December 1, 2017. This Regulation provides the necessary provisions for municipalities across Ontario to implement a Municipal Accommodation Tax (MAT) on overnight and short-term (less than 30 nights) accommodation.
The intent of a MAT is to supplement funds invested by a municipality for tourism initiatives with revenues raised from visitors. It is not intended to fully replace municipal investments made in Tourism, rather, to provide additional funds for services that benefit visitors and residents alike. Most municipalities that have implemented the MAT use the additional revenues to stabilize municipal ‘base’ funding provided to Tourism activities as well as invest in programs and infrastructure that benefit visitors and residents alike.
