Introduction
Beginning in 2021, as part of the Economic Development bill, hotels or motels within a specified region can form a Tourism Destination Marketing District (Tourism District) and collect a special assessment of up to 2% from occupants. The proceeds from the special assessment will be pooled into a fund managed by an entity named by the Tourism District. The Massachusetts Department of Revenue (DOR) is responsible for collecting this special assessment and the Massachusetts State Treasurer’s Office will distribute these funds to the Tourism District’s management entity on a quarterly basis.
Any region in the Commonwealth may form a Tourism District. The funds collected within a district are to be used to expand economic growth within the tourism and hospitality industry for that Tourism District.
FAQs
What is a Tourism District? (Updated August 25, 2021)
A Tourism District is a clearly defined geographic area in which a special assessment is levied against any hotel or motel within the district that is subject to room occupancy excise tax. These “special assessments” cannot exceed 2% of a hotel's or motel's total taxable rents. See Massachusetts General Laws, Chapter 40X.
What properties are required to collect the special assessment?
(Added August 25, 2021)
Each Tourism District determines which hotels or motels within their district will collect the special assessment.
Are special assessments based on the booking date or stay date?
(Added September 27, 2021)
The special assessment is based on the date(s) the customer stays in the hotel or motel. The special assessment will mirror that of the room occupancy excise.
Example: A property included in the Boston/Cambridge Marketing District has a start date of October 1st for the collection of the special assessment. A customer has already booked and paid for a room on September 15th for a stay date of October 15th. The hotel or motel is responsible for the collection of the special assessment for any occupancy that occurs from the start date of the special assessment of October 1.
What are the funds collected by the Tourism District used for?
(Updated August 25, 2021)
The “Tourism Destination Marketing District Plan” will include the guidelines for the Tourism District and describe the supplemental services and programs that will be used to benefit the local economy within the district.
What is the approval process to form a Tourism District?
(Added August 25, 2021)
- First, a formal petition must be filed at the clerk’s office in the city or town taking the lead in forming the district.
- The approval process is coordinated locally by the municipality taking the lead. All required approvals are granted at the municipal level. DOR has no role in the approval process.
More information on the process can be found in the general laws.
How is DOR notified when a new Tourism District is established?
(Updated August 25, 2021)
- A copy of the petition must be sent to DOR within 30 days of its receipt by the municipal clerk in the city or town taking the lead.
- Within 48 hours of formal approval of the Tourism District, the lead jurisdiction must notify DOR of the approval, including the rate of the special assessment and the effective date of the special assessment.
- The management entity designated by the Tourism District must also provide DOR with a report listing every hotel or motel that will be responsible for the special assessment by name, address, zip code, federal employer identification number (FEIN), DOR assigned Room Occupancy (ROC) account number, and the certificate number found on the FORM RO-1. A copy of the petition and the hotel's or motel's information should be sent to DOR at tdmd@dor.state.ma.us.
What duties does DOR perform in connection with the Tourism District Program? (Updated August 25, 2021)
DOR’s role is strictly administrative and is limited to the collection of special assessments due within a given Tourism District. All Tourism District funds paid to DOR will be transferred to the Massachusetts State Treasurer’s Office. The Treasurer’s Office will then allocate funds to the Tourism District’s management entity on a quarterly basis.
How are Tourism District special assessments paid to DOR? (Updated August 25, 2021)
Tourism District special assessments are required to be reported and paid monthly on the Room Occupancy Consolidated (ROC) return filed through MassTaxConnect. It is anticipated that a line will be added to the ROC return to report the Tourism District special assessments.
Are intermediaries required to collect and remit Tourism District special assessments for hotel or motel clients located in a Tourism District?
(Updated August 25, 2021)
Yes, intermediaries must report and remit Tourism District special assessments to DOR in the same way they report and remit other room occupancy excise taxes and fees. When a Tourism District is established, hotels or motels within the district are responsible for informing all intermediaries they employ that they are located within a Tourism District and the intermediary must collect the applicable Tourism District special assessment.
Are special assessment filings included with other room occupancy excise taxes and fees when calculating the Advance Payment requirement? (Updated August 25, 2021)
Yes. If an operator or intermediary collected more than $150,000 in room occupancy taxes in the prior calendar year, they are required to make an advance payment. The total of all room occupancy excise taxes and fees, including the Tourism District special assessment, are included when determining whether an advance payment is required and when calculating the advance payment amount. You can find further guidance regarding advance payment requirements on the Mass.gov website.
Is an operator or intermediary responsible for paying the special assessment if they fail to collect it from occupants?
(Updated August 25, 2021)
Yes. The special assessment will be treated as a tax for administration and collection purposes and the operator or intermediary will be required to pay the special assessment along with applicable interest and penalties if it’s paid late.
Management Entity Contact Information & Requirements for Existing Districts
Boston/Cambridge
Greater Boston Convention & Visitors Bureau (GBCVB)
2 Copley Place, Suite 105
Boston, MA 02116
617-867-8278
- The special assessment collection of 1.5% shall take effect October 1, 2021.
- All lodging businesses with fifty (50) or more rooms located within the boundaries of the cities of Boston and Cambridge shall be subject to the special assessment.
Questions
If you have questions, please send them to tdmd@dor.state.ma.us.