On May 17, 2017, the Province enacted Bill 127, Stronger, Healthier Ontario Act, 2017, providing municipalities the authority to levy a transient accommodation tax (hotel tax). The Transient Accommodation Regulation 435/17 came into force on December 1, 2017, outlining provisions for municipalities across Ontario to implement a Municipal Accommodation Tax (MAT).

The Municipal Accommodation Tax is a new revenue tool that the provincial government has given Ontario municipalities to further promote tourism as an economic driver.

The Regulation applies if a municipality imposes a tax in respect of the purchase of transient accommodation in the municipality under section Municipal Act 400.1 of the Act.

On January 14, 2019, Town Council approved By-Law 1943, a by-law to establish a Municipal Accommodation Tax within the boundaries of the Town of Marathon, in the District of Thunder Bay.

The Municipal Accommodation Tax is effective June 1, 2019 at a rate of 4%.

The tax applies to accommodation sold for a continuous period of less than 30 days in a hotel, motel, lodge, inn, bed and breakfast, dwelling unit or any place an accommodation is provided.

Amenity fees and service charges including meals, room incidentals, valet services or parking provided they are separately itemized on the invoice are not included in this tax. Hospitality rooms and meeting rooms that do not contain a bed are not considered accommodations.

The Municipal Accommodation Tax must be identified as a separate item or charge on each bill, receipt or invoice.

Forms for Accommodation Providers

Monthly Remitters:

A provider shall remit the amount collectible for the previous month on or before the last day of every month, and shall submit the Municipal Accommodation Tax Return Form (Schedule B) to the Town at that time. (For example, the September MAT return form and remittance is due to the Town on or before Oct. 31)

Quarterly Remitters

A Provider shall remit the amount for the previous quarter on or before the last day of the month following the end of the quarter and shall submit the Municipal Accommodation Tax Return Form (Schedule B) to the Town at that time.

  • Q1 (January – March) is due on or before April 30
  • Q2 (April – June) is due on or before July 31
  • Q3 (July – September) is due on or before October 31
  • Q4 (October – December) is due on or before January 31

Information for Accommodation Providers

What is the Municipal Accommodation Tax?

The Municipal Accommodation Tax, or MAT, is a 4% tax charged on the cost of fixed roof transient accommodations sold for a continuous period of less than 30 days within the boundaries of the Town of Marathon.

The tax applies to all accommodation sold for a continuous period of less than 30 days in a hotel, motel, lodge, inn, hostel, bed and breakfast, dwelling unit or any place an accommodation is provided.

When do I start charging the Municipal Accommodation Tax?

Effective June 1, 2019.

Is this a mandatory or voluntary tax?

Mandatory. The Municipal Accommodation Tax must be collected by the accommodation provider at the same time customers are charged for the booking.

What is the authority to charge the Municipal Accommodation Tax?

On January 14, 2019, Marathon Town Council passed By-Law, 1943 which provides for mandatory collection and remittance of the Municipal Accommodation Tax. The municipality is authorized per section 400.1 of the Municipal Act, 2001 and Ontario Regulation 435/17 to establish and to collect the tax.

What happens with the money collected through the Municipal Accommodation Tax?

The tax will generate funding annually to promote tourism within the Town of Marathon. 50% of the net revenue from the Municipal Accommodation Tax will go to tourism promotion and development with a focus on attracting more visitors to the Town.

The other 50% of the net revenue will be retained by the Town of Marathon, earmarked for infrastructure projects that promote tourism and that benefit residents and visitors and will be used as council directs.

What hotel/accommodation charges are exempt from the Municipal Accommodation Tax?

Amenity fees and service charges including meals, room incidentals, valet services or parking provided they are separately itemized on the invoice.

Hospitality rooms and meeting rooms that do not contain a bed are not considered accommodations.

Are long-term contracts for room rentals with businesses that exceed 30 days exempt?

Yes, the purchaser, per the By-law, is the person or business who remits money for the room and therefore the Municipal Accommodation Tax would not apply for a contract of 30 days or more.

What if I have existing contracts with businesses with a fixed room rate?

Municipal Accommodation Tax applies to accommodations purchased on or after June 1, 2019. If payment occurs on or after June 1st for accommodation occupied on or after June 1st, Municipal Accommodation Tax applies even if provided through a corporate contract.

Do I need to show the Municipal Accommodation Tax on the invoice or receipt?

Yes, every bill, receipt, invoice or similar document for the purchase of accommodation must have a separate item identified as “Municipal Accommodation Tax” showing the rate at which the Municipal Accommodation Tax is calculated (4%) and the amount of the Municipal Accommodation Tax charged.

Is the Harmonized Sales Tax (HST) charged on the Municipal Accommodation Tax?

Yes, if the accommodation provider is registered for HST. The accommodation provider is responsible for collecting and remitting the HST on the room charge and on the Municipal Accommodation Tax. HST is remitted directly to the Canada Revenue Agency.

What revenue does the Municipal Accommodation Tax apply to if I charge a fee that includes accommodation and meals (i.e. bed and breakfast)?

It is the responsibility of the accommodation provider to allocate the revenue from the accommodation charge separate from other services, amenities or charges on the invoice and collect and remit the Municipal Accommodation Tax on the accommodation portion of the fees. If the fees are not separately listed on the invoice, the Municipal Accommodation Tax will apply to the entire invoice.

What happens if guests do not show up for their reservation?

The Municipal Accommodation Tax is to be collected and remitted if the accommodation is charged. If the guest is not charged but is required to pay a cancellation fee, the Municipal Accommodation Tax would not apply to the cancellation fee.

Do I have to charge the Municipal Accommodation Tax if a guest has booked their stay prior to June 1, 2019, when the Municipal Accommodation Tax is implemented?

If the accommodation was booked and paid for prior to June 1, 2018, the Municipal Accommodation Tax is not applicable. If the accommodation was booked before June 1, 2019, but paid for on or after June 1, 2019, the Municipal Accommodation Tax is to be charged, collected and remitted.

If a guest's stay begins prior to June 1, 2019 and ends after June 1, 2019, do I charge the Municipal Accommodation Tax when their stay begins?

The Municipal Accommodation Tax must be charged starting June 1, 2019. The Municipal Accommodation Tax is not to be applied to any nights prior to June 1, 2019.

If a guest puts a deposit to hold a room prior to June 1, 2019 for a booking June 1, 2019 or later, does Municipal Accommodation Tax apply?

Yes, if final payment in full for accommodation occurs on or after June 1, 2019, the Municipal Accommodation Tax applies to the accommodation rate, regardless of any deposits made.

When is my first remittance due?

The Municipal Accommodation Tax collected for the month of June must be reported and paid to the Town by July 31, 2019. Quarterly remitters are required to follow a calendar year with the third quarter ending September 30th and remittance due to the Town by October 31, 2018.

Quarterly remittance is as follows:

Q1 (January – March) is due on or before April 30

Q2 (April – June) is due on or before July 31

Q3 (July – September) is due on or before October 31

Q4 (October – December) is due on or before January 31

What is the purpose of the Accommodation Establishment Information Form?

The Accommodation Establishment Information Form (Schedule A – BL74/2018) will be used by the Town to set up your establishment name, address and contact information correctly in our accounting system and provide you with a customer ID. This customer ID will then be used to associate your monthly remittances and payments with the proper establishment.

How do I report and remit the Municipal Accommodation Tax that I collected?

Complete the Town of Marathon's Municipal Accommodation Tax Return Form (Schedule B – By-Law 1943).

See the form for instructions and information about reporting periods, calculations, exemptions and adjustments, payment and submission.

What if a refund was issued to a guest after submitting the return?

Adjustments from prior reporting periods can be made in the period the refund was returned.

What if I did not collect any Municipal Accommodation Tax in the reporting period?

If you did not sell any accommodations subject to the Municipal Accommodation Tax and thus no Municipal Accommodation Tax was collected, you will still be required to submit the Municipal Accommodation Tax Return indicating that no Municipal Accommodation Tax was collected in the reporting period.

Guest Frequently Asked Questions

Have questions? View the following frequently asked questions for answers.

What is the Municipal Accommodation Tax (MAT)?

The tax is added to the price paid for a room booked at a fixed roof accommodation in the Town of Marathon as required by law. The rate is 4% of the total room cost.

The tax applies to all accommodation sold for a continuous period of less than 30 days in a hotel, motel, lodge, inn, hostel, bed and breakfast, dwelling unit and other place transient accommodation is provided operating within the Town of Marathon.

The tax is effective June 1, 2019

How is the Municipal Accommodation Tax applied to the purchase price of accommodations?

The amount of the tax must be clearly identified as a line item on your bill or invoice as “Municipal Accommodation Tax” The amount is 4% of the total accommodation cost.

Are other charges by accommodation providers exempt from the Municipal Accommodation Tax?

Yes. The Municipal Accommodation Tax is only applied to the total purchase price of your accommodation (i.e. room fee). It does not apply to amenity fees or service charges including meals, room incidentals, valet services or parking. However, to be exempt from the Municipal Accommodation Tax, these amenities and services charges must be separately itemized on the invoice/bill.

Is the payment of the Municipal Accommodation Tax optional?

No. The Municipal Accommodation Tax is mandatory as per Town By-law. It must be paid at the same time you complete the purchase, in full, for your stay.

If I'm travelling for medical purposes do I have to pay the MAT?

Yes. However, the Ontario Ministry of Health & Long-Term Care provides funding through the Northern Health Travel Grant for eligible applicants.

What happens with the money collected through the Municipal Accommodation Tax?

The tax will generate funding annually to promote tourism within the Town of Marathon. 50% of the net revenue from the Municipal Accommodation Tax will go to tourism promotion and development with a focus on attracting more visitors to the Town.

The other 50% of the net revenue will be retained by the Town of Marathon, earmarked for infrastructure projects that promote tourism and that benefit residents and visitors and will be used as council directs.

For more information relating to the Municipal Accommodation Tax in the Town of Marathon please contact us.

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