Post Content

The room occupancy or room excise tax in Massachusetts is 5.7 percent, but cities and towns since 1985 have had the option of placing an additional local option rooms tax of 4 percent. Last October, the local option was increased to 6 percent. Revenue generated from this local option is returned to individual cities and towns.

Of the 176 communities that currently have a local option room occupancy tax in effect, 85 in the past year have voted to increase the rate to 6 percent, or, in the case of Salem, to 5 percent, while North Attleborough has adopted the local option at 4 percent.

In other words, about half of the communities that have been collecting the local option have approved an increase in the rooms tax under the higher rate allowed since last year.

DOR's Financial Services Bureau produces a Room Occupancy Revenue Annual Report. In fact, four of these reports are available at DOR's web site. The most recent report for FY09, reflecting collections before the local option rate went to 6 percent, shows the local option generated cities and towns nearly $90 million, while the state collected $109.5 million from its 5.7 percent rooms excise tax.

The key to interpreting this report when looking at an individual city or town is to realize that the revenue numbers presented are equal to 1 percent of the room tax collected. So to estimate how much a community is receiving or might receive, take that 1 percent and multiply it by 4, or 6, as the case may be.

DOR also publishes separately a list of communities that have adopted the local option rooms tax (and when they did so) in the local options acceptance  page on its web site. Scroll halfway down the list under the first bullet and you will find "room occupancy excise" link.

 

 

Written By:

Recent Posts

Are you ready to join the DOR Team? posted on Oct 30

At the Department of Revenue, we are committed to recruiting and retaining talented people throughout the New England region. We have many positions open for a seasonal workforce to join our team. What’s a Seasonal position? Seasonal positions are essential jobs that help the Department   …Continue Reading Are you ready to join the DOR Team?

Tax Security 2.0 – A “Taxes-Security-Together” Checklist posted on Jul 16

DOR is sharing the following IRS “Taxes-Security-Together” checklist to increase awareness amongst taxpayers, and specifically tax professionals, about safeguarding private taxpayer information. The “Taxes-Security-Together” Checklist Some tax pros may routinely overlook these checklist items and others need to regularly revisit them. The steps are not   …Continue Reading Tax Security 2.0 – A “Taxes-Security-Together” Checklist

Why do most Massachusetts taxpayers file electronically? Lots of good reasons. posted on Mar 17

If you haven’t filed your Massachusetts personal income tax return, there are very good reasons to consider e-filing.  Millions of taxpayers have already taken advantage of e-filing, the most convenient way to get your taxes done. Why are we confident that e-filing is the very   …Continue Reading Why do most Massachusetts taxpayers file electronically? Lots of good reasons.