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Municipal Accommodation Tax (MAT)

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The Province of Ontario issued the Transient Accommodation Regulation 435/17, which came into force on December 1, 2017 and provided the necessary provisions for municipalities across Ontario to implement a Municipal Accommodation Tax (MAT).

On June 3, 2019 City Council approved By-law 19-077, a by-law to implement a 4% Municipal Accommodation Tax (MAT) on short-term accommodations in the City effective July 1, 2019.

The tax applies to accommodation sold for a continuous period of less than 30 days in a hotel, motel, lodge, inn, bed and breakfast, dwelling unit or any place an accommodation is provided.

The Municipal Accommodation Tax is not a tax on local businesses. The tax is applied to the accommodation charge only and not to other fees such as valet parking, laundry service or continental breakfast.

The Municipal Accommodation Tax must be identified as a separate item or charge on each bill, receipt or invoice. All guest invoices will include a separate line for 'Municipal Accommodation Tax' as of July 1, 2019.

 

GENERAL INFORMATION

 

What is the Municipal Accommodation Tax?

The Municipal Accommodation Tax, or MAT, is a 4% tax charged on the cost of fixed roof transient accommodations sold for a continuous period of less than 30 days within the boundaries of the City of Quinte West.

The tax applies to all accommodation sold for a continuous period of less than 30 days in a hotel, motel, lodge, inn, hostel, bed and breakfast, dwelling unit or any place an accommodation is provided.

When do I start charging the Municipal Accommodation Tax?

Effective July 1, 2019.

Is this a mandatory or voluntary tax?

Mandatory. The Municipal Accommodation Tax must be collected by the accommodation provider at the same time customers are charged for the booking.

What is the authority to charge the Municipal Accommodation Tax?

On June 3 2019, Quinte West City Council passed By-law 19-077 which provides for mandatory collection and remittance of the Municipal Accommodation Tax.  The municipality is authorized per section 400.1 of the Municipal Act, 2001 and Ontario Regulation 435/17 to establish and to collect the tax.

What happens with the money collected through the Municipal Accommodation Tax?

Funds generated through the Municipal Accommodation Tax will be invested in tourism development efforts in the City of Quinte West. This could include such things as event sponsorship, marketing and promotions, tourism asset development and destination development initiatives.

Half of the net funds collected will be distributed to the City's Destination Marketing Organization (DMO), Bay of Quinte Regional Marketing Board for the exclusive purpose of promoting tourism. The balance of the funds collected will be retained by the municipality and used for tourism-related activities.

What hotel/accommodation charges are exempt from the Municipal Accommodation Tax?

  • Amenity fees and service charges including meals, room incidentals, valet services or parking provided they are separately itemized on the invoice.
  • Hospitality rooms and meeting rooms that do not contain a bed are not considered accommodations.

Are long-term contracts for room rentals with businesses that exceed 30 days exempt?

Yes, the purchaser, per the By-law, is the person or business who remits money for the room and therefore the Municipal Accommodation Tax would not apply for a contract of 30 days or more. 

What if I have existing contracts with businesses with a fixed room rate?

Municipal Accommodation Tax applies to accommodations purchased on or after July 1, 2019. The Municipal Accommodation Tax applies even if provided through a corporate contract.

Exemptions

The Municipal Accommodation Tax is not applicable to the following accommodations:

  • Accommodations for a continuous period of more than 30 nights
  • Universities and colleges
  • Hospitals, long-term care homes (as defined in the Long-Term Care Homes Act, 2007) and treatment centres that receive provincial aid under the Ministry of Community and Social Services Act
  • Accommodations supplied by employers to their employees in premises operated by the employer
  • Tent or trailer sites supplied by a campground, tourist camp or trailer park

 

INVOICING INFORMATION

 

Do I need to show the Municipal Accommodation Tax on the invoice or receipt?

Yes, every bill, receipt, invoice or similar document for the purchase of accommodation must have a separate item identified as “Municipal Accommodation Tax” showing the rate at which the Municipal Accommodation Tax is calculated (4%) and the amount of the Municipal Accommodation Tax charged.

Is the Harmonized Sales Tax (HST) charged on the Municipal Accommodation Tax?

Yes, if the accommodation provider is registered for HST. The accommodation provider is responsible for collecting and remitting the HST on the room charge and on the Municipal Accommodation Tax. HST is remitted directly to the Canada Revenue Agency. 

What revenue does the Municipal Accommodation Tax apply to if I charge a fee that includes accommodation and meals (i.e. bed and breakfast)?

It is the responsibility of the accommodation provider to allocate the revenue from the accommodation charge separate from other services, amenities or charges on the invoice and collect and remit the Municipal Accommodation Tax on the accommodation portion of the fees. If the fees are not separately listed on the invoice, the Municipal Accommodation Tax will apply to the entire invoice.

What happens if guests do not show up for their reservation?

The Municipal Accommodation Tax is to be collected and remitted if the accommodation is charged.  If the guest is not charged but is required to pay a cancellation fee, the Municipal Accommodation Tax would not apply to the cancellation fee.

 

COLLECTION AND REMITTANCE

 

How do I report and remit the Municipal Accommodation Tax that I collected?

Complete the City of Quinte West’s Municipal Accommodation Tax Return Form.

 See the form for instructions and information about reporting periods, calculations, exemptions and adjustments, payment and submission.

What if a refund was issued to a guest after submitting the return?

Adjustments from prior reporting periods can be made in the period the refund was returned.

Is there interest or penalties if I don't remit?

Yes. Interest and penalties will apply on any overdue remittance at a monthly rate of 1.25% from the first day after the tax remittance is due and interest will apply after each month thereafter on the principal amount owing during time as the default continues.

What if I did not collect any Municipal Accommodation Tax in the reporting period?

If you did not sell any accommodations subject to the Municipal Accommodation Tax and thus no Municipal Accommodation Tax was collected, you will still be required to submit the Municipal Accommodation Tax Return indicating that no Municipal Accommodation Tax was collected in the reporting period.

Is there an auditing process to verify submissions?

Yes. The City of Quinte West's tax collectors may inspect and audit all books, documents, transactions and accounts of accommodation providers for the purposes of administering and enforcing By-law 19-077

 

Click here to download the City of Quinte West Municipal Accomodation Tax Remittance Form

ABOUT THE LEGISLATION

 

The Municipal Accommodation Tax is a new revenue tool that the provincial government has given Ontario municipalities to further promote tourism as an economic driver.

On May 17, 2017, the Province enacted Bill 127, Stronger, Healthier Ontario Act, 2017, providing municipalities the authority to levy a transient accommodation tax (hotel tax).  The Transient Accommodation Regulation 435/17 came into force on December 1, 2017, outlining provisions for municipalities across Ontario to implement a Municipal Accommodation Tax (MAT).

The Regulation applies if a municipality imposes a tax in respect of the purchase of transient accommodation in the municipality under section Municipal Act 400.1 of the Act

 

For additional information on MAT please contact jenniferr@quintewest.ca

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