11/10/2010
Maine Lodging Tax Among Lowest at 7%
Few people are going to come to Bar Harbor or Lamoine, Maine based on our tax rate on lodgings or rental cars, but high taxes could be nasty surprise if they go elsewhere. Lodging tax is popular with state legislatures because it is not paid by the voting citizens of the state. It is typically two or even three times the sales tax rate, or in the case of New Hampshire, an infinite multiple, since NH has no sales tax.
Beware the Lodgings Tax Surprise
Complicating things is the way lodgings tax is divided in some places between state and local governments. Massachusetts has a reasonable 5.7% state tax, but local government adds another 4% for a total of 9.7%. New York State’s 4% has another 9.75% added for a total of a whopping 13.75%. How about Canada? The sales tax in Nova Scotia is 13% (called HST) and lodgings add another 2% for a total of 15%. New Brunswick charges 13% and Quebec’s rate will increase to 14% on January 1, 2011.
I had to dig hard for these numbers, it seems that these taxes are somewhat cloaked in secrecy. Just try to price out a hotel room in New York and you may just get a “plus tax” quote. In fact, the rates quoted above may be wrong, (they are from the Brookings Institution) but my guess is if anything they may be higher. For example, if you first figure a 5% tax and then add another 4%, it does not add up to 9% if you add the 4% onto the adjusted amount:
$100+5%= $105
$105+4%=$109.20. $109.20/$100=9.2%, not 9%!
Maine’s lodgings tax is 7%. That’s all. We value our tourist industry so we don’t try to trick you into a double digit surprise. Our regular sales tax is a reasonable 5% and although our state gasoline tax is a hefty 31 cents per gallon, a recent trip to Michigan left me with the impression that Maine gasoline is among the cheapest in New England. Tourism is a big part of the Maine economy, we need you! We want you to come back.
Do yourself a favor and look at how Maine and our Acadia area compare to other places for value before making your vacation decisions for next year. We have the most free activities, free shuttle bus on the island, inexpensive restaurants, our own affordable lodgings and of course, the lowest tax.
Did I mention the beauty?
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Filed under Acadia, Lodging by on Nov 10th, 2010.
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