Saturday, September 13, 2008

Boston Tea Party..."only in Summerside."

I'm kind of on Mr. Reid's side here and I suspect he's right that the Town hasn't got a right to enforce this tax but I'm sure most people in Town would know who is bullying him by threatening to cut off his power. We don't need any more taxes shoved down the throats of our tourists and surely not to pay for the big white $40,000,000.00 elephant.
Mulberry Motel won’t charge tax
Owner says history backs him up
Transcontinental Media SUMMERSIDE – Accommodation owners and operators in Summerside are questioning the legalities of the city driven two per cent room tax levy implemented in April of this year. Don Reid, owner/operator of the Mulberry Motel said the history behind the levy bylaw shows it is the industry that collects and spends the levy fees — and not the municipality. Reid describes himself as a “non participant” in the two per cent tax levy and has not collected the fee since it came into effect in April.Reid said eight years ago, the Charlottetown-based P.E.I. Hotel Association looked for support for a room tax levy. Two years later, the Province contracted consultant Gerry Gallant to undertake a study into a two per cent accommodation levy. “He said, in a virtual one-liner, for the tourism industry to implement a two per cent levy would be detrimental to the industry,” Reid said.Reid said since that time the P.E.I. Hotel Association has been able to amalgamate several individual tourism-related groups to form Tourism Charlottetown. He said now there was a vehicle in place to bring the City of Charlottetown online to create the levy bylaw. The Tourism Industry Association of P.E.I. came on board and the Province passed legislation empowering the P.E.I. Hotel Association to move on the levy. Other areas of the Province, including Summerside, were included in this process.Reid said the big difference between Summerside and Charlottetown is the City of Summerside collects the tax and spends it on the new Credit Union Place whereas in Charlottetown the industry collects the levy and uses it for tourism promotion. Reid pointed to Ontario as having a system of room levies that could work in Summerside. He said the province had an eight per cent sales tax on accommodations which was used for marketing. The province forgave that eight per cent and allowed the industry to collect a three per cent levy, which they merge with other funding sources to promote tourism. He said this move is giving tourists a five per cent reduction on the room taxes they pay when visiting that province. He said on Prince Edward Island, the total room levy is 17.7 per cent — five per cent federal, ten per cent provincial and now the two per cent municipal tax. Reid said if the province would forgive the 10 per cent provincial tax and allow the local industry to promote tourism, it could be accomplished at a rate of five per cent, lowering the overall tax rate to 12.7 per cent and giving tourists a five per cent reduction in room costs.The city is not taking Reid’s decision lightly and is threatening to cut off the water and electricity to Mulberry Motel on Sept. 19 unless he complies with the bylaw. Reid said he has support from other accommodations operators and the group is looking for a meeting with the city to resolve this issue.

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