Council Votes to Increase Meals, Hotel/Motel Tax

Winthrop's municipal council voted July 28 to adopt a .75 percent meals tax and to increase its hotel/motel tax to the new maximum rate of 6 percent.

Council president Thomas E. Reilly said the $74,000 in revenue that the state projects the two local tax options will raise this fiscal year will help offset cuts in state aid to Winthrop, which were $772,000 deeper than expected.

He also called meals and hotel/motel taxes "more broadly based than property taxes," and hence fairer.

The new local tax options are in addition to the state’s existing meals tax of 6.25 percent and hotel/motel tax of 5.7 percent.

The fiscal 2010 state budget allows municipalities to levy a local .75 percent meals tax, and increase by 2 percentage points the maximum allowable hotel/motel tax rate.

Municipalities needed to act by August 31 through a positive vote of their town meeting or city council if they want either tax increase to take effect the second quarter of the fiscal year, which begins October 1. Otherwise, the next earliest time they could implement the taxes would be January 1.

Winthrop was one of 25 communities to adopt the meals tax, and one of 29 to adopt the room occupancy tax. Here is the full list of cummunities to adopt the meals tax, and here is the full list of communities who adopted the room occupancy tax as well as current tax occupancy tax rates for all Massachusetts communities.

The estimated meals tax revenue for Winthrop, assuming adoption by 8/31/2009, was $61,026.