Technical Information Release  TIR 23-3: Tourism Destination Marketing District Special Assessment

Date:	01/25/2023
Referenced Sources:	Massachusetts General Laws

I. Introduction

Recent legislation[1] enacted chapter 40X of the General Laws, which authorizes a group of lodging businesses located within a defined geographic region to create a Tourism Destination Marketing District (“District”) to promote economic development. Each District is administered by a Management Entity charged with implementing the purposes of the District. A District may impose a special assessment on certain lodging businesses within the District in order to fund the provision of programs, activities or information beyond the standard government services provided in the District.[2] This Technical Information Release discusses the reporting, collection and remittance responsibilities related to the special assessment.

II. The Tourism Marketing District Special Assessment

Chapter 40X authorizes each District to impose a special assessment, not to exceed 2%, of the total amount of rent collected by lodging business located within the District that is taxable under the room occupancy excise imposed pursuant to Chapter 64G.[3] For purposes of the assessment, a lodging business is defined to include any hotel or motel, as defined in G.L. c. 64G, § 1, which is subject to the room occupancy excise imposed pursuant to G.L. c. 64G.[4]

Districts are authorized to “formulat[e the] special assessment structure”,[5] and establish the “criteria by which lodging businesses are assessed….”[6] Therefore, a District may authorize lodging businesses to pass the assessment on to their occupants, similar to the room occupancy excise.  

The special assessment will be treated as a tax for administration and collection purposes and therefore shall be subject to G.L. c. 62C.[7]

III. District Reporting Requirements

Chapter 40X requires certain information to be reported to the Commissioner of Revenue (the “Commissioner”):

1. The Municipal Governing Body[8] of a District’s Lead Jurisdiction[9] must notify the Commissioner within 48 hours after the formal approval of a District of (i) its approval of a District, (ii) the rate at which any special assessment is to be imposed, and (iii) the effective date of the any such special assessment.[10]
2. The Management Entity of a District must report the name, address, zip code and federal employer identification number of each lodging business within the District to the Commissioner within 30 days of the formation of a District. [11] Each lodging business within a District must be registered as an operator for purposes of the room occupancy excise imposed pursuant to G.L. c. 64G and must comply with all of the reporting requirements of G.L. c. 64G.
3. Upon the addition of a new lodging business to an existing District, the applicable Management Entity must report the name, address, zip code and federal employer identification number of the business to the Commissioner within 30 days of the addition of such business to the District.[12]

In addition, if a lodging business relocates or otherwise ceases its operations within a District, thereby terminating its obligation to collect the Special Assessment, the Management Entity of the affected District must notify DOR within 30 days of the removal of such business from the District.

IV. Collection and Remittance Requirements

Lodging businesses subject to the special assessment shall remit the special assessment to the Commissioner at the same time and in the same manner as they report the room occupancy excise pursuant to G.L. c. 62C, § 16(g).[13] Where an intermediary collects and remits the room occupancy excise on behalf of a lodging operator in a District, as required under G.L. c. 64G, § 13, the intermediary must remit the special assessment to the Department with their room occupancy excise returns filed electronically through MassTaxConnect, in accordance with the procedures in 830 CMR 64G.1.1.

All provisions of chapter 62C relative to assessment, collection, payment, abatement, verification, and administration, including penalties and interest, shall apply to the special assessment as though it was a tax enumerated in G.L. c. 62C, section 2.[14]

Any lodging business within a District that fails to timely file a return, pay the special assessment, or do so in the manner required by the Commissioner may be subject to penalties under G.L. c. 62C.[15]

 

                                                                        /s/Geoffrey E. Snyder
                                                                        Geoffrey E. Snyder
                                                                        Commissioner of Revenue
 

GES:RHF:jjt

January 25, 2023

TIR 23-3

 

[1] Section 56 of Chapter 358 of the Acts of 2020, as amended by Sections 14, 15 and 16 of Chapter 29 of the Acts of 2021.

[2] St. 2020, c. 358 § 56 (G.L. c. 40X § 1).

[3] St. 2020, c. 358 § 56 (G.L. c. 40X § 7).

[4] St. 2020, c. 358 § 56 (G.L. c. 40X § 1).

[5] St. 2020, c. 358 § 56 (G.L. c. 40X § 2).

[6] St. 2020, c. 358 § 56 (G.L. c. 40X § 3).

[7] St. 2021, c. 29 § 14 (G.L. c. 40X § 8).

[8] For purposes of G.L. c. 40X, the term “Municipal Governing Body” is defined as “the city council or board of aldermen in a city or the board of selectmen or town council in a town.” St. 2020, c. 358 § 56 (G.L. c. 40X § 1).

[9] A District’s “Lead Jurisdiction” refers to the city or town in which the tourism destination marketing district petition is filed. See St. 2020, c. 358 § 56 (G.L. c. 40X § 1).

[10] St. 2021, c. 29 § 15 (G.L. c. 40X § 9).

[11] St. 2021, c. 29 § 14 (G.L. c. 40X § 8).

[12] Id.

[13] Id.

[14] Id.

[15] Id.