New Municipal Accommodation Tax is Coming to Mississauga
The City of Mississauga has approved the introduction of a Municipal Accommodation Tax (MAT), also known as a hotel tax, at a rate of 4 per cent on the purchase of short term accommodation within the City starting July 1, 2018. The tax will generate approximately $9.8 million annually in additional tourism revenue and improve tourism initiatives within the City. The tax was introduced as a result of Bill 127 that the Government of Ontario passed in 2017.
The MAT was approved at a General Committee Meeting in November with an effective start date of July 1, however, Councillors are looking to move the start date to as early as April 1, 2018. The proposed earlier start date will bring in an additional $2.5 million in additional tax revenue and be in line with Toronto's implementation start date.
At a hotel industry Stakeholder Engagement Meeting in December, attendees expressed concerns over the earlier start time. A later implementation start date would give businesses time to prepare staff and organize administrative ends.
Some of the stakeholders at the meeting also questioned how the new tax revenues would be distributed. Allocating the new revenue dollars to a General Revenue account would not directly benefit tourism within the City.
Staff at the City have proposed the creation of two new MAT reserve funds to specifically allocate resources to tourism. Councillors have also indicated that a part of the $9.8 million annual revenue will be shared with Tourism Toronto to implement tourism initiatives. Initiatives will focus specifically on increasing tourism through the Tourism Master Plan, Economic Development initiatives, tourism infrastructure developments as well as service and program initiatives.
"We are already working closely with Tourism Toronto to build tourism in Mississauga. Our goal is to use the tax to attract more visitors and generate more hotel stays all of which will make our local economy stronger," said Pat Saito, Ward 9 Councillor and Chair of the Mississauga Tourism Advisory Board.
Although the MAT is also known or labeled as a hotel tax, individuals renting on online platforms such as Airbnb or HomeAway will also be subject to the tax. Accommodations provided under a 30 day continuous period will have the tax applied.
The tax is administered on a self-reporting system, a process that hoteliers are already familiar with and is similar to the process that businesses use to remit HST to the CRA. A Municipal Accommodation Tax form will be available for accommodation providers and remitted payments must be submitted with the form every month for revenues generated the previous month.
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