Some Sault hotels dawdle on paying accommodation tax

Marwa Grimes

Hard on the heels of last week’s city council decision to crack down on short-term-rental owners who aren’t collecting the four per cent municipal accommodation tax, we learned this week that some much larger hotels also aren’t paying their fair share.

“We’ve got a medium-sized hotel that hasn’t reported, I think, since May,” Travis Anderson, the city’s director of tourism and community development, told a meeting of the Tourism Sault Ste. Marie board.

One larger hotelier is also overdue on meeting its obligations, Anderson said.

The hotels weren’t identified and Anderson didn’t say how long the big hotel has been in arrears.

Sault Ste. Marie imposes a four per cent municipal accommodation tax (MAT) on all accommodations fewer than 30 consecutive days, including hotels, motels, motor hotels, lodges, inns, resorts, bed and breakfasts or any other place an accommodation is provided.

City officials believe homeowners who rent out all or part of their properties to short-term visitors are largely noncompliant with their licensing and tax obligations.

Of 158 active short-term rental listings in the city last month, only 16 were licensed.

The city, they say, received just $5,622 of the $47,000 in MAT taxes it ought to have received from January to July if all current listed short-term properties were licensed.

The MAT tax generates funding for tourism promotion and development within the city.

Last week, city councillors agreed to crack down on rogue operators:

  • short-term rental hosts must include their municipal licence or licence number all advertising, to allow renters and enforcement staff to easily identify licensed properties
  • the three-year $50 licensing fee will rise to $500 effective Jan. 1, 2024. Building and fire inspection fees will be on top of that
  • the city will pay $15,000 to a third-party service to get civic addresses for short-term renters, allowing them to launch a “proactive” enforcement blitz in 2024
  • city staff will push during upcoming budget deliberations for two new building inspectors to help in the crackdown

Over all, the city is doing “fairly well” at MAT collections, Anderson told this week’s Tourism Sault Ste. Marie board meeting.

“The occupancy rates have been down about five per cent in July and roughly four per cent in August,” Anderson said.

The decline is part of a province-wide trend, board members were told.

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