Municipal Accommodation Tax

The MAT is intended to help our tourism industry remain competitive and increase destination development while also increasing community infrastructure investments. This helps with our collective recovery as we navigate beyond the effects of the pandemic and into the future. 

The MAT was originally introduced in 2017 provincially, and most Ontario tourism destinations now have it in place, including several that implemented the MAT during the pandemic. Stratford City Council initially approved the MAT in principle in February 2020. It was intended to take effect January 1, 2021 but was paused as a result of the pandemic. The revised implementation date, approved in July 2022, is for short-term (30 days or less) accommodation stays on or after July 1, 2023.

Yes.  All single-tier and lower-tier municipalities have the authority to put a municipal accommodation tax in place under section 400 of the Municipal Act, 2001 and Ontario Regulation 435/17.

The tax is mandatory on all short-term (30 days or less) transient stays that occur on or after July 1, 2023. The MAT is imposed under the authority of the Municipal Act; as such, it is required to be reported and collected. If it is not remitted, the accommodator would be subject to interest charges and additional collection fees.

No.  The transient accommodation tax authority does not extend to incidental fees and charges unrelated to the purchase of accommodation.  The by-law states:  The Municipal Accommodation Tax shall not apply to Ancillary Charges that are itemized separately on the Purchaser's receipt.  For example, the purchase of a meal in a hotel restaurant would not be considered transient accommodation and therefore would not be made subject to a Municipal Accommodation Tax.  However, where the provider of transient accommodation fails to separately itemize ancillary charges, the Municipal Accommodation Tax shall apply to the total amount of the purchase price.

The municipality is required to share a minimum of 50% of the net revenues from the tax with an eligible not-for-profit tourism organization chosen by the municipality.  In Stratford, this organization is Destination Stratford and it is governed by a Board of Directors.

For the 50% of the funds that will be retained by the City, the funds initially will be placed in a reserve fund entitled Municipal Accommodation Tax that has the express purpose of being used to fund partially or wholly, specific Tourism-related initiatives. The initiatives, to be determined, are intended to benefit both visitors and residents, and are at the sole discretion of Council.

Municipal accommodation tax regulations under the Municipal Act, 2001, and the City of Toronto Act, 2006 do not address, or limit in any way, how a municipality may use or spend revenues from a transient accommodation tax other than the noted sharing arrangement.

Accordingly, the regulations do not require a municipality to spend revenues from a tax in the year following the collection. Decisions on how to spend the revenues generated from the MAT  is at the discretion of the municipality.  As such, a municipality could use revenues from a tax to contribute to a reserve to support a bigger tourism project that is on the horizon.

The City has partnered with the Ontario Restaurant Hotel and Motel Association (ORHMA) to administer collection of the tax from accommodators and to facilitate the reporting required.

The City of Stratford has designated the Ontario Restaurant Hotel Motel Association (ORHMA) as its agent to collect MAT from Accommodation Providers and remit to the City.

Accommodators will be required to register, at no cost, with the Ontario Restaurant Hotel and Motel Association.  Reporting on applicable bookings will be reported through ORHMA, as well as remittances for amounts collected will be processed through this organization.  More information on this process will be available during an ‘Ask Me Anything MAT’ session scheduled from 1:00pm-3:00pm on January 30, 2023. Session details will be communicated by the City and Destination Stratford.

ORHMA provides an online “MAT Reporting Tool” to Accommodation Providers to report MAT on a monthly basis. Required data:

• Name of the Property
• Property MAT contact person name, email and phone
• Contact information of Manager, Accountant and Owner
• Room nights available
• Room nights occupied
• Rooms Revenue
• Rooms Revenue with Exemption/reasons

The “MAT Reporting Tool” will calculate MAT owing. Accommodation providers will remit MAT collected to ORHMA on or before the 15th day of the calendar month for the prior month.

Yes.  Information provided to either the ORHMA or the City will be kept confidential and used strictly for the purposes of determining  the MAT required. Information will be shared as required between the City and ORHMA for the purposes of administering the by-law, but will not be shared for other purposes.

Yes.  The transient accommodation tax authority allows each municipality that chooses to implement a transient accommodation tax to determine the types of short-term accommodation the tax would apply to. The tax can only apply to accommodation that is short-term in nature.

That means a local municipality could apply the tax to hotel accommodation only, or it could choose to apply the tax to other types of short-term accommodation, including transient accommodation offered through services such as Airbnb, or other accommodation that is short-term in nature. It should be noted that short-term accommodations at universities and colleges cannot be taxed under a municipal accommodation tax.

Yes. The 13% Harmonized Sales Tax (HST) applies to the all-in price of transient accommodation, including any municipal accommodation tax.

Yes, all accommodation at colleges and universities are exempt from the MAT at all times.

The City’s Municipal Accommodation by-law outlines the design.of the tax, including the appropriate enforcement mechanisms.

There isn’t a list of what these charges might or could be, as this might vary substantially between accommodators, based on their offerings.  Whether these are an integral part of the experience or not might influence whether or not separation is a preferred approach by the accommodator.

This would be up to the individual accommodator.  The only required separation is the accommodation costs from anything else as it is only accommodation costs that the fee applies to.  If costs are not separated, the 4% MAT applies to the whole amount charged.  If the costs are separated, the MAT would apply only to the accommodation portion.

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

If limitations with booking platforms or software do not allow the MAT to be calculated as a separate line item, the MAT can be worked into the room cost. In this case, a note on the receipt, invoice or statement is required and must include the MAT percentage (4%)  as well as the dollar amount.

Deposits do not affect how much of the stay that the MAT applies to.  If there is any balance owing after July 1^st, then MAT applies on the whole amount.

No.  Airbnb will not be collecting the MAT on behalf of Stratford hosts.  For now, there is functionality to ‘add tax’ through the Airbnb platform, which hosts can read about on the Airbnb website. To access the ‘add tax’ feature, hosts will need Airbnb’s professional hosting tools.

If you did not sell any accommodations during the reporting period, and therefore did not collect any Municipal Accommodation Tax, you will still be required to report this, indicating that MAT was not collected during the reporting period.

Yes. The City's tax collectors may inspect and audit all books, documents, transactions, and accounts of accommodation providers for the purposes of administering and enforcing By-law No. 93-2022.

Accommodation Providers must keep books of account, records and all documents for a period of seven years related to the

• sale of accommodation
• amount of the Municipal Accommodation Tax collected, and
• the remittances made to the ORHMA

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.