Hotel and short term accommodation tax

Important details:

• Implementation date of the Municipal Accommodation Tax (MAT) is January 1, 2018
• All guest invoices are to include a line for “Municipal Accommodation Tax” as of that date
• Remittances to Ottawa Gatineau Hotel Association (OGHA) must be made through their defined process within 30 days after months’ end
• The four percent (4%) MAT applies only on the room cost portion of overnight accommodation of all guest invoices
• Late remittances will be charged an interest rate of 1.25% per month, in accordance with regular City of Ottawa interest rate for late charges

As a popular destination for sight-seeing, business and government travel, the City of Ottawa welcomes more than 10 million visitors a year. The City of Ottawa along with other levels of government, business associations and non-profit organizations promote the National Capital Region as a place to visit all year round. Visitors to the Nation’s Capital bring significant economic benefit to our city, injecting approximately $2.2 billion into our local economy in 2019.

On November 23, 2017, the Province of Ontario issued the Transient Accommodation Regulation 435/17, which came into force December 1, 2017 and provides the necessary provisions for municipalities across Ontario to implement a Municipal Accommodation Tax (MAT). On December 13, 2017, Ottawa City Council approved the adoption of a mandatory Municipal Accommodation Tax of four percent (4%) effective January 1, 2018 in the City of Ottawa.

The Municipal Accommodation Tax (MAT) replaces the hotel industry’s Destination Marketing Fee (DMF), and supports Ottawa Tourism’s ongoing sales, marketing and destination development efforts.

As an accommodation provider doing business and/or facilitating business transactions within the boundaries of the City of Ottawa, you will be obliged by law to collect and remit a four percent (4%) Municipal Accommodation Tax (MAT) on all rooms sold for overnight accommodation. Revenues generated from other hospitality services, including but not limited to such things as meeting room rentals, food & beverage, and room service, laundry services, internet access, parking etc. are excluded from the MAT.

The MAT is applicable to all accommodations under 30 days at hotels, motels, individual accommodators using a common platform marketplace service, as well as other accommodators not included in the exemption list. This exemption list is based on exemptions provided under the provincial regulation, as well as that approved by Ottawa City Council, and aimed at exempting traditional Bed & Breakfast operators from charging and remitting the MAT.

The City of Ottawa has authorized the Ottawa Gatineau Hotel Association (OGHA) to collect the tax on its behalf and to administer the transition of the funds to Ottawa Tourism for the purposes of promoting and growing the tourism industry in Ottawa. The funds will be used to promote Ottawa and our region as well as to support product development and tourism growth.

To register, email info@ogha.ca and provide the property address and your contact information. A representative from the OGHA will respond and start the process for online reporting and monthly payment. This will begin with setting up your exclusive username and password.

As a MAT collector, there will be some responsibilities placed upon you regarding verified annual room revenue statements to ensure the proper amount of taxes are collected and remitted.

Should you have any questions, please feel free to contact OGHA or the City of Ottawa at municipalaccommodationtax@ottawa.ca.

What types of accommodations are exempted from this tax?

• Accommodations that are rented by the month 30+ days (applies only in the situation where the same individual is renting the same hotel room in a similar nature as one would rent an apartment over 30 consecutive days).
• Lodgings provided to students by a university, college or post-secondary while the student is registered at and attending the institution.
• Every hospital referred to in the list of hospitals and their grades and classifications maintained by the minister of Health and Long-Term Care under the Public Hospitals Act and every private hospital operated under the authority of a license issued under the Private Hospitals Act
• Every long-term care home as defined in subsection 2(1) of the Long-Term Care Homes Act, 2007, retirement home and hospices
• Accommodations paid for by a School Board as defined in subsection 1 (1) of the Education Act.
• Treatment centres that receive provincial aid under the Ministry of Community and Social Services Act
• Every house of refuge, or lodging for the reformation of offenders
• Every charitable, non-profit philanthropic corporation organized as shelters for the relief of the poor or for emergency
• Every tent or trailer sites supplied by a campground, tourist camp or trailer park
• Every accommodation supplied by employers to their employees in premises operated by the employer
• Every hospitality room in an establishment that does not contain a bed and is used for displaying merchandise, holding meetings, or entertaining

A traditional Bed & Breakfast operator may apply to the City for an exemption from the charging and remittance of the Municipal Accommodation Tax, provided that the application sufficiently meets the City’s eligibility criteria:

1. The Bed & Breakfast establishment meets the definition of the Zoning By-law 2008-250 as amended
2. The Bed & Breakfast establishment is occupied and operated by the property owner, and is classified in the residential property tax class
3. The Bed & Breakfast directly invoices for the accommodation, and not a third-party home-sharing listing entity

Bed & Breakfast operators requesting an exemption to the Municipal Accommodation Tax should contact the City at municipalaccommodationtax@ottawa.ca(link sends e-mail) to receive an exemption application. Completed applications will be reviewed by the City for approval, and a formal notification will be provided to Accommodators. Until an exemption has been granted to you, you are not considered to be exempt from the Municipal Accommodation Tax and are required to collect and remit the applicable funds. You are required to apply for this exemption on an annual base.

How much is the Municipal Accommodation Tax, and how is it applied?

The Municipal Accommodation Tax is 4%. It came into effect January 1, 2018 and is only applicable to the room portion of the costs associated to overnight accommodations. All other revenues generated from the accommodation services; whether sold individually or included in a room package; are excluded from the Municipal Accommodation Tax, including but not limited to, meeting room rental, food and beverage, room service, laundry services, internet access, parking etc.

The HST is applicable to the funds received from the Municipal Accommodation Tax if the business is an HST registrant.

How do I remit the Municipal Accommodation Tax that I have collected?

The City of Ottawa has authorized the Ottawa Gatineau Hotel Association (OGHA) to collect the tax on their behalf and to administer the transition of the funds to Ottawa Tourism for the purposes of promoting and growing the tourism industry in Ottawa.

The remittance process will include a monthly remittance form which is available on the OGHA website and payments can be made through EMT, EFT, Online Bank Bill Payment or by cheque. Submissions and payment are due within 30 days of the previous month. For smaller establishments, a request can be made to the City of Ottawa to remit quarterly.

Email info@ogha.ca to set up a profile, with login credentials and receive instructions on submission deadlines. Any late remittances will be charged an interest rate of 1.25% per month.

Is there an auditing process to verify monthly submissions?

Both the City of Ottawa and OGHA will routinely select submissions for audit. The verification process will include a 3rd party auditor assigned by, and paid for by the respective governing authority.

Are future bookings that were prepaid prior to the enactment of the by-law exempt from the Municipal Accommodation Tax?

Yes. Accommodations paid for prior to January 1, 2018 are exempt. Reservations that were not pre-paid by this date are subject to the Municipal Accommodation Tax upon check-in and payment of the lodgings.

What happens with the funds generated through the Municipal Accommodation Tax?

Funds generated through the Municipal Accommodation Tax are invested in sales, marketing, and development activities through Ottawa Tourism, the city’s official destination marketing organization. Ottawa Tourism promotes Ottawa for leisure visitors, meetings and conventions, major events, media relations, tour operators, and travel trade. Ottawa Tourism also invests in long term destination development initiatives aimed at enhancing the visitor experience.

Municipal Accommodation Tax participants are entitled to complimentary membership with Ottawa Tourism, and have opportunities to become directly involved in various committees that guide the planning and budgeting of the organization.

I am a private property owner who occasionally rents out accommodation to people who are only staying at my property a few days. I don’t consider this a small business as I don’t provide accommodations that often. Do I need to collect the Municipal Accommodation Tax from my guests?

Yes. All short-term accommodations are subject to the Municipal Accommodation Tax, including those in private homes. If you are invoicing your guests directly then a 4% Municipal Accommodation Tax must be added to their bill and these funds must be submitted through the collection process operated by the Ottawa Gatineau Hotel Association. If, however, your guests pay for your accommodations using the online home sharing service AirBnB, the service provider will collect the MAT for you beginning August 1, 2018 and submit it on your behalf. If using another online payment system, the service provider may collect the MAT for you and remit to you both the rental fee and the MAT. In the case of the latter, it is your responsibility to remit the Municipal Accommodation Tax to the Ottawa Gatineau Hotel Association. Please contact the Ottawa Gatineau Hotel Association at info@ogha.ca(link sends e-mail) to set up the submission process.

How do refunds and no shows affect the amount of Municipal Accommodation Tax I remit?

If the Municipal Accommodation Tax was added to an invoice that was paid by a guest, and you subsequently issue a full or partial refund on that accommodation charge, the customer should also be refunded the applicable amount of MAT that corresponds to the refund amount. If the refund occurs after you have remitted the MAT, you can adjust the MAT submission the following month noting the refund in your submission documentation.

If you experience no shows and your policy is to charge a portion of the room rental as a penalty, then the MAT should also be charged to the no show portion. If, however, you have a flat administrative fee that is charged for no shows no matter what the room rate, then the MAT does not need to be applied.

Do I need to prepare a monthly report if I did not collect any MAT that month?

Yes, if all of your guests were for extended stay (same guest for 30 days or more in the same room) or another qualified exemption you must still submit a monthly report providing the details for the exception.

On Thursday November 23, 2017, the Province of Ontario issued the Transient Accommodation Regulation 435/17, which came into force December 1, 2017 and provides the necessary provisions for municipalities across Ontario to implement a Municipal Accommodation Tax (MAT). On Wednesday December 13, 2017, Ottawa City Council approved the adoption of a mandatory Municipal Accommodation Taxof 4% effective January 1, 2018 in the City of Ottawa. The Municipal Accommodation Tax will replaced the hotel industry’s voluntary Destination Marketing Fee (DMF), and supports the costs of marketing Ottawa as a tourism destination. All accommodation providers doing business and/or facilitating business transactions within the boundaries of the City of Ottawa, are obliged by law to collect and remit a 4% Municipal Accommodation Tax (MAT) on all room revenue sold for overnight accommodation.

Revenues generated from other hospitality services including, but not limited to, meeting room rental, food & beverage, room service, laundry service, parking etc. will be excluded from the Municipal Accommodation Tax. Some Bed & Breakfast operators may be exempt from charging a Municipal Accommodation Tax, otherwise this tax is applicable to all accommodations under 30 days at hotels, motels, resorts, inns, individual accommodators using a common platform marketplace service, as well as other accommodators not previously excluded.

The Municipal Accommodation Tax revenue is provided to Ottawa Tourism for the purposes of promoting and growing the tourism industry in Ottawa. The funds will be used to promote Ottawa and the Capital region as well as to support product development and tourism growth.

The Municipal Accommodation Tax came into effect on January 1, 2018 and will be charged at a rate of 4% for the overnight accommodation portion of your bill. The Municipal Accommodation Tax is HST applicable if the business is an HST registrant.

For visitors - Frequently asked questions

How much is the Municipal Accommodation Tax, and how is it applied?

The Municipal Accommodation Tax is 4%, and came into effect January 1, 2018, It is only applicable to the room portion of the costs associated to overnight accommodations. All other revenues generated from the accommodation services including, but not limited to, meeting room rental, food and beverage, room service, laundry services, parking etc. are excluded from the Municipal Accommodation Tax.

The HST is charged on the Municipal Accommodation Tax if the business is an HST registrant.

I plan on staying at an AirBnB during my stay in Ottawa, do I need to pay the Municipal Accommodation Tax for stays in private residences?

Yes, as of August 1, 2018 when booking your accommodations on AirBnB you will pay 4% MAT of your total cost.

Can I refuse to pay the Municipal Accommodation Tax?

No. The Municipal Accommodation Tax is mandatory and must be paid at the same time that you pay for the accommodation.

Prior to January 1, 2018, I pre-paid for a future room booking, and no Municipal Accommodation Tax was added, will I have to pay this tax when I check-in?

No. Accommodations paid for prior to January 1, 2018 are exempt. Reservations that were not pre-paid by this date are subject to the Municipal Accommodation Tax upon check-in and payment of the accommodation.

What happens with the funds generated through the Municipal Accommodation Tax?

Funds generated through the Municipal Accommodation Tax are invested in destination marketing, sales, and development activities through Ottawa Tourism, the city’s official destination marketing organization. Ottawa Tourism promotes Ottawa for leisure visitors, meetings and conventions, major events, media relations, tour operators, and travel trade. Ottawa Tourism also invests in long term destination development initiatives aimed at enhancing the visitor experience.

I believe I was wrongfully charged the MAT. Who do I contact regarding a refund?

The room purchaser would contact the accommodation provider.

Is the 30-day exemption clause applicable to individual (1 person) and group (more than one person) bookings?

It applies only in the situation where the same individual is renting the same hotel room in a similar nature as one would rent an apartment over 30 consecutive days.

I am looking to do accumulative rooms booking for a group of four for 30+ days, what do I need to know regarding the 30 days exemption?

To qualify for the 30+ days MAT exemption, all the below terms needs to be met:

1. The same guest for the entire period,
2. The same room for the entire period,
3. One payment identifiable to the single booking.