Here’s When Mississauga’s New Tax Goes into Effect
With Mississauga tackling more grand-scale development projects and working to redefine itself as a vibrant urban destination, it has to be a little more creative when it comes to revenue generation.
The brand new Municipal Accommodation Tax (otherwise known as MAT or "the hotel tax"), a tax that will only affect travelers and hotels/touritst lodgings and will, ideally, generate funding for the city's tourism and place-making initiatives.
The four per cent tax, effective April 1, 2018, will apply to continuous hotel, motel, lodge, inn, and bed and breakfast stays that last less than 30 days.
Online private short-term rentals such as Airbnb and HomeAway will also be subject to the MAT starting on April 1.
"This is another step forward to putting Mississauga on the map," said Mayor Bonnie Crombie. "Through the MAT, we will be able to reinvest significantly more money into the promotion of Mississauga, our culture, our activities and events, and further promote our city as a tourism destination. There is a 'buzz' about Mississauga these days and through the MAT, we will be able to do more to promote our great city to the world."
City staff estimates that the MAT will produce $9.8 million in revenues annually, with a further $150,000 coming from online private short-term rentals.
The city says two reserve funds have been created to manage the revenue collected. One reserve fund will ensure that the City meets its revenue-sharing obligations with Tourism Toronto. The other will collect the city's share of the MAT to be used for future tourism-related initiatives.
"The two reserve funds ensure that all the MAT revenue is set aside from the City's general revenue and is spent only on activities to promote and support tourism in Mississauga," said Gary Kent, commissioner of corporate services and Chief Financial Officer. "Keeping the revenue separate also reflects the City's commitment to transparency in how we do business."
Certain overnight stays will not be taxed, including stays at:
- Treatment centres that receive provincial aid
- Houses of refuge, or lodging for the reformation of offenders
- Emergency shelters
- Tent or trailer sites supplied by a campground, tourist camp or trailer park
- Premises operated by an employer for employees who are staying overnight
- Hospitality room in an establishment that may or may not contain a bed and is used for displaying merchandise, holding meetings or entertaining.
In the spring, city staff will present a report to council recommending next steps for the tourism master plan, the funding agreement with Tourism Toronto and recommendations on the use of MAT revenues.