Middletown council authorizes pursuit of state legislation to permit up to 2% local hotel tax increase

The Town of Middletown Council on April 28 approved a resolution authorizing town staff and the solicitor to pursue enabling state legislation that would allow the town to add up to two percentage points to its local hotel tax.

Town staff explained the proposal is intended to create a nonproperty revenue source to offset the fiscal impacts of tourism on municipal services. The resolution asks the town solicitor and administrator to work with state legislators, and Council President Paul M. Rodricks referred to Representative Courtfriend as a typical sponsor who requests a municipal resolution in support.

Town Administrator (Sean, last name not specified in the transcript) briefed the meeting that the additional hotel-tax revenue would be general town revenue and that similar enabling legislation has been pursued by other municipalities. Meeting dialogue noted short-term rentals are currently treated differently under state law and that recent state-level budget proposals may change short-term-rental tax collection and distribution.

Mark Donahue, a resident, asked whether short-term rentals would also be responsible for the tax; staff said current state rules exempt whole-house short-term rentals from the town’s 5% hotel tax but that proposed state budget changes could alter collection and distribution. Council members noted each percentage point of local hotel tax was estimated in the meeting to be worth about $1,600,000 to the town. The council voted in favor of the resolution; the transcript records an aye vote and a recorded motion-carry.

The resolution does not by itself change the tax rate; it merely authorizes the town to pursue state enabling legislation that would permit the town to do so at a later date if the Legislature enacts such authority.