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 City of Cornwall.

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, 2018.

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 April 9 2018, Cornwall City Council passed By-Law 2018-039 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?

Funds generated through the Municipal Accommodation Tax will be invested in tourism development efforts in the City of Cornwall. This could include such things as event sponsorship, marketing and promotions, tourism asset development and destination development initiatives.

Ten percent (10%) of the funds collected will be used for administration of the MAT program. Half of the net funds collected will be distributed to a separate, non-profit tourism entity called the Tourism Development Corporation of Cornwall (TDCC). The TDCC has been established for the exclusive purpose of promoting tourism and is governed by a Service Agreement with the City of Cornwall. The TDCC has established the Tourism Development Fund to support events and initiatives that enhance Cornwall's tourism sector. For more information, please click here.

The balance of the funds collected will be retained by the municipality and used for tourism-related activities.

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, 2018. If payment occurs on or after September 1st for accommodation occupied on or after June 1st, Municipal Accommodation Tax applies even if provided through a corporate contract.

Exemptions

The Municipal Accommodation Tax is not applicable to the following accommodations:

• Accommodations for a continuous period of more than 30 nights
• Universities and colleges
• Hospitals, long-term care homes (as defined in the Long-Term Care Homes Act, 2007) and treatment centres that receive provincial aid under the Ministry of Community and Social Services Act
• Accommodations supplied by employers to their employees in premises operated by the employer
• Tent or trailer sites supplied by a campground, tourist camp or trailer park

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.

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

Complete the City of Cornwall’s Municipal Accommodation Tax Return Form.

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.

Is there interest or penalties if I don't remit?

Yes. Interest and penalties will apply on any overdue remittance at a monthly rate of 1.25% from the first day after the tax remittance is due and interest will apply after each month thereafter on the principal amount owing during time as the default continues.

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.

Is there an auditing process to verify submissions?

Yes. The City of Cornwall'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 2018-039.