meals and rooms tax in tourist towns

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More state money for tourist towns?

Jul 13, 2017

BY: CCNH-LFDA Highlights

Over the years the New Hampshire Legislature has rejected several attempts to give tourists towns more state revenue.

What is the meals and rooms tax?

The meals and rooms tax, collected at restaurants and hotels, accounts for about 13% of all state tax revenue.

Under current law, New Hampshire towns and cities get back up to 40% of meals and rooms tax revenue. The state distributes the revenue based on the population of each municipality.

The rest of meals and rooms tax revenue goes to administering the tax, tourism development, school building aid, and the general fund of all state revenue.

Should tourist towns get more meals and rooms revenue?

Some legislators from tourist towns believe it would be more fair if towns generating a lot of meals and tax revenue saw more of that returned.

They argue tourist towns benefit the whole state by boosting the economy. However, those towns are burdened with more costs for fire and police, and the state does not give them any extra help.

For example, in 2016 Assistant City Attorney Jane Ferrini testified that Portsmouth only gets back about 5% of the meals and rooms tax revenue it generates.

State aid to towns low overall

Opponents of giving tourist towns more revenue point out that it has been years since the state gave a full 40% of meals and rooms tax revenue back to towns. The next budget will only give about 21% of meals and rooms tax revenue to municipalities. Rather than show preference to tourist towns, the state should honor its original commitment to share revenue with local governments.

Other opponents argue that tourist towns are able to generate extra revenue all on their own, for example through parking tickets and high taxes on scenic properties.

Learn more and have your say

For more information on the meals and rooms tax, visit our issue page

Should NH tourist towns get more money from the state based on how much meals and rooms tax they generate? Share your opinion in the comments below.

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