Projo Biz Blog

Rhode Island's food-service and hotel industries took in less money in February than they did the same month a year ago, based on reports from tax officials.

Meals and beverage tax collections dropped 7.6 percent from February of last year and hotel tax collections dropped 8.0 percent.

One factor in that decline comes straight from the calendar. Last year was a leap year, so February had an extra day. That means February this year had 3.4 percent fewer days. Factoring out that extra day, the losses due to economic reasons were 4.3 percent for meals and beverages and 4.7 for hotel taxes.

The down numbers followed a January that saw a 5 percent increase in meals and beverage tax increases, which one industry expert credited to people diverting spending from costlier entertainment to a meal out.

Among other taxes, the state collects a 1 percent tax on all food and beverages prepared for immediate consumption. That includes purchases at restaurants and bars as well as vending machines, convenience stores and ready-to-eat products at supermarkets. That 1 percent is returned to the host community

The state collects a similar 1 percent tax on hotel stays and returns it to the community, except the city of Newport which collects its own hotel tax.

---