Occupancy/Meals Tax Receipts: Recovering from COVID-19

and the Effects of the Increase from 4% to 6%

by Patrick White

At the May 2021 Town Meeting, the Town approved a warrant article to raise the local occupancy tax from 4% to 6%. It went into effect in October 2021. This was an option made available to the Town by the Commonwealth starting in 2009.

As you can see from the chart below, receipts are at a clip to reach an all-time high, due to a combination of factors: the recovery from COVID-19; the increase in the rate from 4% to 6%; and the additional revenue the Town receives due to strong short-term rentals.

With the average assessment of $600,000, this saves the property taxpayer an average of approximately $120 each per year that would otherwise have to be raised using residential property taxes.

Notes

FY: Fiscal Year (July 1 - June 30)

Q: Quarter

Occupancy: Occupancy tax collected. The town gets 6% of every room, including short-term rental rooms; however, the increase from 4% only went into effect on October 1, 2021.

Meals: Meals tax collected. The town gets 0.75% of every meal sold.

The last two columns compare what we received at 4% vs. what we would have received had we raised the rate earlier.

Photo: Patrick White