830 CMR: DEPARTMENT OF REVENUE
830 CMR 64G.00: ROOM OCCUPANCY EXCISE
830 CMR 64G.00 is amended by adding the following section:
830 CMR 64G.3A.1: Local Option Room Occupancy Excise

(1) Definitions.

(a) Words used in M.G.L. c. 64G, § 3A and in 830 CMR 64G.3A.1 shall have the same meaning as those definitions provided in M.G.L. c. 64G, § 1, including the following:

Hotel, any building used for the feeding and lodging of guests, licensed or required to be licensed under the provisions of M.G.L. c.140, § 6.

Lodging house, a house where lodgings are let to four or more persons not within the second degree of kindred to the person conducting it, licensed or required to be licensed under M.G.L. c. 140, § 23.

Motel, any building or a portion of a building, other than a hotel or lodging house, in which persons are lodged for hire with or without meals and which is licensed or required to be licensed under the provisions of M.G.L. c. 140, § 32B or is a private club.

Occupancy, the use or possession, or the right to the use or possession, of any room or rooms in a hotel, motel, or lodging house designed and normally used for sleeping and living purposes, or the right to the use or possession of the furnishings or the services and accommodations accompanying the use and possession of such room or rooms, for a period of ninety consecutive calendar days or less, regardless of whether such use and possession is as a lessee, tenant, guest or licensee.

Occupant, a person who, for a consideration, uses, possesses or has a right to use or possess any room or rooms in a hotel, motel, or lodging house under any lease, concession, permit, right of access, license or agreement.

Operator, any person operating a hotel, motel, or lodging house in the Commonwealth, including, but not limited to, the owner or proprietor of such premises, lessee, sublessee, mortgagee in possession, licensee or any other person otherwise operating such hotel, motel, or lodging house.

Person, includes an individual, partnership, trust or association, with or without transferable shares, joint-stock company, corporation, society, club, organization, institution, estate, receiver, trustee, assignee, or referee, and any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, or any combination of individuals acting as a unit.

Rent, the consideration received for occupancy valued in money, whether received in money or otherwise, including all receipts, cash, credits and property or services of any kind or nature, and also any amount for which credit is allowed by the operator to the occupant, without any deduction therefrom whatsoever.

(b) In addition, the following terms shall have the following meanings when used in 830 CMR 64G.3A.1:

Commissioner, the Commissioner of Revenue.

Consolidated return, a room occupancy excise return (Form RO-2 or Form RO-QR) which includes the room occupancy excises collected at more than one hotel, motel, or lodging house, and to which a consolidated schedule (Form RO-2C) must be attached. Effective July 1, 1986, the Commissioner will no longer accept consolidated returns. See 830 CMR 64G.3A.1(4)(c).

(c) Effective date, the first day of the first calendar quarter following thirty days after acceptance by a city or town of the provisions of M.G.L. c. 64G, § 3A, or the first day of such later calendar quarter as the city or town may designate when it accepts the provisions of M.G.L. c. 64G, § 3A in the manner specified in that section.

Local excise, the room occupancy excise imposed by M.G.L. c. 64G, § 3A.

Room charge, rent.

State excise, the room occupancy excise imposed by M.G.L. c. 64G, § 3.

Transfer of occupancy, generally, occurs when an occupant checks in or has the right to check in to a room in a hotel, motel, or lodging house. Where an occupancy is for a period of more than one day, a transfer of occupancy is deemed to occur at check-in time on each and every day of the period of occupancy.

(2) Local Option Room Occupancy Excise, In General.

(a) Acceptance of Local Excise and Notification of Commissioner. In order for a city or town to impose the local option room occupancy excise, the city or town must accept the provisions of M.G.L. c. 64G, § 3A in the manner specified in that section. The city or town must determine the rate of the local excise, and then must notify the Commissioner of its acceptance of the local excise, the rate at which the local excise is to be imposed, and the effective date of the local excise. This notification must be received by the Commissioner at least twenty-one days before the effective date.

(b) Local Excise Rate. The local excise may be imposed at any rate up to but not exceeding four percent of the total amount of rent for each occupancy. The additional tax imposed by St. 1969, c. 546, § 22 does not apply to the local excise.

(c) Effective Date of Local Excise. The local excise takes effect on the first day of the calendar quarter following thirty days after acceptance by a city or town of the provisions of M.G.L. c. 64G, § 3A, or on the first day of such later calendar quarter as the city or town may designate.

Example 1: Town A accepts the local excise on March 15, 1988 and does not designate an effective date. The local excise in Town A will take effect on July 1, 1988.

Example 2: City B accepts the local excise on January 30, and designates an effective date of October 1 of the same year. The local excise in City B will take effect on October 1 of the same year.

(d) Notice to Operators. The Commissioner will attempt to notify all operators registered with the Commissioner pursuant to M.G.L. c. 62C, § 67, who operate a hotel, motel, or lodging house within a city or town which has accepted the local excise, of such acceptance, but failure to receive the Commissioner's notification shall not affect an operator's obligation to collect and pay over the local excise.

(e) Collection of Local Excise Upon Transfer of Occupancy. Every operator of a hotel, motel, or lodging house located within a city or town which has accepted the provisions of M.G.L. c. 64G, § 3A is required to collect the local excise upon every transfer of occupancy in the operator's hotel, motel, or lodging house which occurs on or after the effective date of the local excise. See also 830 CMR 64G.3A.1(6).

(f) Exemptions from Local Excise. The local excise exemptions are the same as the state excise exemptions. A local excise is not imposed if the total amount of rent is less than fifteen dollars per day or its equivalent, or if the accommodation is exempt under M.G.L. c. 64G, § 2.

(g) Hotel, Motel, or Lodging House Located within More than One City or Town. The following rules will apply to the collection of the local excise by an operator of a hotel, motel, or lodging house which is located within more than one city or town:

1. When Only One of the Cities or Towns Having a Hotel, Motel, or Lodging House Located Within It Has Imposed the Local Excise. The operator is required to collect the local excise upon every transfer of occupancy in the operator's hotel, motel, or lodging house which occurs on or after the effective date of the local excise. The amount of the local excise collected and paid to the Commissioner by the operator will be credited in full to the city or town which has imposed the local excise. The provisions of this subsection 830 CMR 64G.3A.1(2)(g)1 are illustrated by the following example:

Example 1: Mammoth Motel is located in Town A and Town B. The motel has 300 rooms subject to the local option room occupancy excise, 240 of which are located in Town A, and 60 of which are located in Town B. Town A has accepted the provisions of M.G.L. c. 64G, § 3A, and imposes a local option room occupancy excise at the rate of four percent. Town B does not impose a local excise. The operator has reported two hundred and fifty thousand dollars as the total amount of rent for the transfer of every occupancy in the operator's hotel, motel, or establishment during the period for which the operator is required to file a room occupancy excise return (Form RO-2 or Form RO-QR) with the Commissioner. The operator must collect and remit to the Commissioner an amount equal to four percent of the total amount of rent reported on the excise return (i.e. .04 x $250,000 = $10,000), in accordance with the provisions of this regulation, 830 CMR 64G.3A.1(4) and (5). The amount collected and paid by the operator to the Commissioner (i.e. $10,000) represents the local excise upon every transfer of occupancy in the operator's hotel, motel, or lodging house during the period reported on the excise return. The Commissioner will credit this amount in full to Town A, which has imposed the local excise.

2. When Two or More of the Cities or Towns Having a Hotel, Motel, or Lodging House Located Within Them Have Imposed Local Excises. The operator is required to collect the local excise at the highest rate imposed by such cities or towns for every transfer of occupancy in the operator's hotel, motel, or lodging house which occurs on or after the effective date of the local excise. The amount of the local excise collected and paid to the Commissioner by the operator will be credited by the Commissioner to each city or town which has imposed the local excise in the following manner:

a. The Commissioner will multiply the total amount of rent for every transfer of occupancy for the period covered by the excise return (Form RO-2 or Form RO-QR) by the highest excise rate imposed by the cities or towns in which the hotel, motel, or lodging house is located. This amount is the total amount of the local excise which must be divided among the cities or towns which have imposed the local excise.

b. For each city or town which has imposed the local option room excise, the Commissioner will multiply the result in 830 CMR 64G.3A.1(2)(g)2.a. above by a fraction, the numerator of which will be the number of rooms subject to the local option room occupancy excise located in each city or town imposing a local option room occupancy excise, and the denominator of which will be the total number of rooms subject to the local option room occupancy excise in the operator's hotel, motel, or lodging house. The resulting amount will be the amount that the Commissioner will credit to each city or town which imposes a local option room occupancy excise tax. The provisions of this subsection 830 CMR 64G.3A.1(2)(g)2., are illustrated by the following example:

Example 2: Mammoth Motel is located in Town A and Town B. The motel has 300 rooms subject to the local option room occupancy excise, 240 of which are located in Town A, and 60 of which are located in Town B. Both towns have accepted the provisions of M.G.L. c. 64G, § 3A, and impose a local option room occupancy excise at the rate of four percent. The operator has reported two hundred and fifty thousand dollars as the total amount of rent for occupancy at the time the operator is required to file a room occupancy excise return (Form RO-2 or Form RO-QR) with the Commissioner. The operator must collect and remit to the Commissioner an amount equal to four percent of the total amount of rent reported on the excise return (i.e. $250,000 x .04 = $10,000) in the manner prescribed by this regulation, 830 CMR 64G.3A.1(4) and (5). This amount represents the local excise upon every transfer of occupancy in the operator's hotel, motel, or lodging house during the period reported on the excise return. The Commissioner will divide and credit this amount to each city or town which has adopted the local option room occupancy excise as follows:

Town A - Multiply $10,000 (total excise due from Mammoth Motel) by

240( number of rooms subject to the local option excise located in Town A)
300 (total number of rooms subject to the local option excise in motel)

i.e. $10,000 x 240 = $8,000
300

The Commissioner will credit $8,000 to Town A.

Town B - Multiply $10,000 (total excise due from Mammoth Motel) by

60 ( number of rooms subject to the local option excise located in Town B)
300 (total number of rooms subject to the local option excise in motel)

i.e. $10,000 x 60 = $2,000
300

The Commissioner will credit $2,000 to Town B.

3. Application for Alternative Division of Local Option Room Occupancy Excise. If a city or town imposing a local room occupancy excise and having a hotel, motel, or lodging house located within it and within at least one other city or town believes the provisions of this regulation 830 CMR 64G.3A.1(2)(g)2. are not reasonably adapted to approximate fairly the local option room occupancy excise attributable to each city or town which has imposed such an excise, such city or town, through its duly authorized representative, may write to the Commissioner to request that its local option room occupancy excise be determined by a method other than the method set forth in this regulation, 830 CMR 64G.3A.1(2)(g)2. by writing to the Determination Bureau at 100 Cambridge Street, Boston, MA 02204. If the Commissioner determines that the proposed alternative method is more reasonably adapted to approximate fairly the local option room occupancy excise attributable to each city or town which has imposed the excise, the Commissioner may use the proposed alternative method in dividing the excise among the cities and town instead of the method provided in this regulation, 830 CMR 64G.3A.1(2)(g)2., above. If the Commissioner determines that the proposed alternative method is not more reasonably adapted to approximate fairly the local option room occupancy excise attributable to each city or town which has imposed the excise, the Commissioner may reject the proposed alternative method and may instead use the method provided by this regulation, 830 CMR 64G.3A.1(2)(g)2., above, in dividing the excise.

(h) Revocation or Amendment of Local Excise. A city or town cannot impose the local excise for a period less than twelve months. If a city or town wishes to revoke or amend its local excise, such revocation or amendment may not take effect until at least twelve months after the date the local excise was last imposed or amended. If a city or town wishes to impose a local excise after a local excise has been revoked, the imposition of the local excise may not take effect until at least twelve months after the date the local excise was last revoked.

Example 1: City A accepts the local excise on February 10, 1988 to be effective on April 1, 1988. The effective date of any revocation or amendment to City A's local excise may not be any earlier than April 1, 1989.

Example 2: Town B accepts the local excise on May 10, 1988 to be effective on July 1, 1988. Town B revokes the local excise to be effective July 1, 1989. The imposition of another local excise may not take effect any earlier than July 1, 1990.

(i) Effective Date of Revocation or Amendment of Local Excise. Revocation of or amendments to the local option room occupancy excise are subject to the same provisions which govern the effective dates for acceptances as contained in 830 CMR 64G.3A.1(2)(c).

Example 1: On March 15, 1988, town A accepts the provisions of M.G.L. c. 64G, § 3A, and imposes a local excise at a rate of 3%. The local excise in Town A takes effect, on July 1, 1988. On August 15, 1989, Town A in accordance with the provisions of M.G.L. c. 64G, § 3A revokes the imposition of the tax. The revocation is effective October 1, 1989.

Example 2: Same facts as in 1, except that on August 15, 1989, Town A changes the rate to 4%. This amendment is effective October 1, 1989.

(3) Notification of Room Occupants by Operator.

(a) During First Six Months of Local Excise. Beginning on the effective date of the local excise in any city or town, each operator of a hotel, motel, or lodging house in the city or town must inform occupants of the existence and rate of the local excise in the following manner. Every occupant's bill must clearly state the name of the city or town imposing the local excise, the rate of the local excise, and rate of the state excise. The occupant's bill must include such information in a format similar to the following:

State room occupancy tax - 5.7%
[Name of city or town] room occupancy tax - [rate]%.

(b) After the First Six Months. Beginning on the first day of the seventh month following the effective date of the local excise in any city or town, every bill issued to an occupant must state separately the room charge, and the dollar amounts and the rates of the local excise and the state excise, in the following manner. The separately stated local excise must be clearly labeled with the name of the city or town imposing the local excise; the occupant's bill must include such information in a format similar to the following:

Room charge [or similar term] .
State room occupancy tax - 5.7% .
[Name of city or town] room occupancy tax - [rate]% .

(c) Extensions. The Commissioner in his discretion may, for good cause shown, extend the time within which an operator may use the notification format described in 830 CMR 64G.3A.1(3)(a). An operator's request for extension of the time within which the operator may use the notification format described in 830 CMR 64G.3A.1(3)(a) must be in writing; must state the reasons for the request; must state the date by which the operator will be able to comply with the requirements of the notification format described in 830 CMR 64G.3A.1(3)(b); and must be received by the Commissioner no later than the first day of the fifth month following the effective date of the local excise. The Commissioner will notify the operator of the Commissioner's decision on the request for extension.

(4) Room Occupancy Excise Return.

(a) Requirement to File Room Occupancy Excise Return.

1. Every operator, as defined in M.G.L. c. 64G, § 1, licensed or required to be licensed under M.G.L. c. 140, must file a room occupancy excise return (Form RO-2 or Form RO-QR) with the Commissioner, whether or not the operator must collect any local or state excises.

2. An operator must file a room occupancy excise return (Form RO-2 or Form RO-QR) for each and every hotel, motel, or lodging house at which the operator collects the state excise or both the state excise and the local excise.

3. Each return must separately state the amount of state excise and the amount of local excise, if any, which is required to be collected from the hotel, motel, or lodging house whose excise is reported on such return.

(b) Determination of Quarterly or Monthly Filing of Room Occupancy Excise Return. The Commissioner determines whether an operator must file a room occupancy excise return on a quarterly or a monthly basis, pursuant to 830 CMR 62C.16.1, by reasonably estimating each operator's room occupancy tax liability, including amounts reasonably estimated to be collected from both the local excise and the state excise.

(c) Consolidated Room Occupancy Excise Return Not Allowed. Effective July 1, 1986, the Commissioner will no longer accept consolidated returns.

(5) Payment of Room Occupancy Excise.

(a) Payment of Local Excise. The operator must pay the local excise to the Commissioner at the same time and in the same manner as the state excise due the Commonwealth is paid. Both excises must be paid by the operator to the Commissioner at the time for filing returns specified in 830 CMR 62C.16.1.

(b) Underpayment and Overpayment. If an operator pays to the Commissioner less than the full amount of the local and state excises due, or more than the full amount of the local and state excises due, the following rules will apply:

1. If the sum of the declared amounts due for each excise on the return does not equal the amount paid with the return, then the amount paid with the return will be credited to the state and to the city or town in proportion to their respective excise rates.

2. If the sum of the declared amounts due for each excise on the return equals the amount paid with the return, then the declared amounts will be credited to the state and to the city or town, as long as the declared amounts due do not indicate an overpayment for one excise at the same time an underpayment is indicated for the other excise. If the declared amounts due for the excises on the return indicate an overpayment for one excise at the same time an underpayment is indicated for the other excise, the overpayment will be allocated to the underpayment so as to minimize or eliminate the deficiency in the underpaid excise.

(6) Transition Rules: Imposition of Local Room Occupancy Excise.

(a) Occupant Who Checks Out on Effective Date of Local Excise. The local excise is imposed upon every transfer of occupancy which occurs on or after the effective date of the local excise in a city or town. Where an occupant checks in to a room in a hotel, motel, or lodging house before the effective date of the local excise and checks out on the effective date of the local excise, the transfer of occupancy has occurred before the effective date of the local excise and, therefore, the local excise is not imposed.

(b) Occupant Who Checks Out After Effective Date of Local Excise. If an occupant checks in to a room in a hotel, motel, or lodging house before the effective date of the local excise and checks out after the effective date of the local excise, the operator must collect the local excise from such occupant beginning on the effective date of the local excise, even if the operator rents rooms at a rate covering a period of occupancy longer than one day. If an occupancy is for a period of more than one day, the operator must collect the local excise on the rent attributable to those actual or deemed transfers of occupancy which occur on or after the effective date of the local excise.

REGULATORY AUTHORITY
830 CMR 64G.3A.1: M.G.L. c. 64G; M.G.L. c. 14, s. 6(1); M.G.L. c. 62C, s. 3.

REGULATORY HISTORY
Date of Promulgation: 11/21/85
Amended: 7/1/86
Amended: 9/16/88
Amended: 1/5/90