Article would add surcharge of up to 6% to state room excise tax
Annual Town Meeting voters will get to decide this spring whether to tax lodgers spending the night in a Harvard hotel room by as much a 6 percent. The article, which the selectmen added to the town warrant at their meeting last week, joins a previously approved article that would allow the town to tax meals sold at local stores, farm stands, pizza restaurants, and the school cafeteria. But whether a room tax can add significantly to town revenues will depend on whether it can be imposed on hotels within historical Harvard town boundaries at Devens or is limited by law to Harvard’s sole in-town hotel business, the Friendly Crossways Conference Center on Old Littleton County Road.
With Peter Warren abstaining, the selectmen voted 3-1 to put the question before voters. Selectmen Tim Clark, Maria Sobalvarro, and Lucy Wallace voted in favor; Chairman Ron Ricci was opposed.
Mary Helan Turner, co-owner of Friendly Crossways, said in a letter to the selectmen that the proposed meal tax would not be a burden because the conference center is a nonprofit, and most of the meals served there are tax-free. But Friendly Crossways does pay a 5.2 percent room tax to the state and an additional tax from Harvard would add to that amount. “I would rather not have to pay it,” Turner wrote, since most of the center’s guests are nonprofit groups. But her husband, Keith Turner, was quoted by Clark as saying that “we’re a small fish;” if the purpose was to “secure revenues from the [Marriott SpringHill Suites] hotel in Harvard’s boundaries at Devens” then it is something the town should consider.
The ATM articles give Harvard voters a chance to accept the two local tax options that the Massachusetts state legislature gave towns earlier this year as a way to compensate for steep cuts in local aid. The so-called local sales tax option lets towns collect a 0.75 percent tax on meals sold by local establishments, which the state recently estimated would, if enacted, add $10,000 to Harvard revenues in fiscal year 2011.
The local option rooms excise tax has been available for years and lets towns tax hotel lodgers by as much as 4 percent. Harvard has never used it. The new state law increases the maximum local tax to 6 percent, but if it applies to only one recognized establishment, the Friendly Crossways Conference Center, state regulations prohibit the state Department of Revenue (DOR) from providing an estimate of the revenue it would generate. Town Administrator Tim Bragan said he had tried to get an estimate from the DOR, but had been refused.
Still to be determined is whether Harvard has the authority to tax rooms—or meals, for that matter—at Devens establishments. Selectwoman Marie Sobalvarro, in an e-mail to the Press, said it was her opinion that “we can neither assess nor collect tax revenue from Devens.” She quoted the Massachusetts acts that created Devens, which states: “The towns shall not be entitled to assess any fees or taxes on property, persons or businesses located in Devens.” The real question, she said, is whether the Devens Enterprise Commission (DEC), which is the de facto Devens town administrator, can collect the tax.
“We don’t need permission to try,” said Clark in a separate e-mail to the Press. “The question is, should we try—since Devens is not a recognized municipality.”
“If we can’t [tax Devens establishments],” Wallace said last week before her vote, “I think that since we only have one establishment in town, then I would not be inclined to do the room tax on them.”
“Don’t you want to give voters a choice, as you did in the case of the meals tax?” asked Ricci, referring to the earlier and more heated debate over a meals tax last month.
“I’m just saying that personally I would not be inclined to do it,” said Wallace.