Will Meal & Rooms Tax Drop Make a Difference?

The state's Meals and Rooms tax drops by a half-percent from 9% to 8.5% on Friday as the new state budget takes effect but will it have a real impact for Seacoast restaurants and hotels?

Although a small decrease, there are two possible effects the cut could have, according to Mike Somers, President of the New Hampshire Lodging Restaurant Association. One could be the perception of the state as having low taxes.

"The state positioned itself that it was going to cut taxes with low taxes or no tax. Hopefully people will perceive us as a lower tax alternative to some of our neighbors," Somers told Seacoast Current. "But as a functional matter of whether or not someone will rent a hotel room over a half-percent I don't know that's going to have a dramatic effect."

Massachusetts with its "Taxachusetts" image has a 6.25% meals tax and a 5.7% "room occupancy excise tax." The meals tax in Maine is 8% and its lodging tax 9%.

The lowered New Hampshire taxes may not be a factor for a normal night out but could help when planning a large function.

"The taxes ends up being a significant piece of the overall bill," Somers said. "If you're doing a family reunion and there's whole branches of the family coming maybe now it starts to become a little more of a consideration."

Staffing Still a Struggle for Hospitality Industry

Somers said the situation remains the same for staffing as demand continues to be up for hospitality services.

"A lot of folks are still out and about still enjoying restaurants, hotels, etc. We're into leaf peepers but from a worker standpoint we're still struggling to fill positions to handle the amount of demand that's out there," Somers said.

And what about ski season which is around the corner? Resorts are starting to gear up but Somers thinks they will also face the same staffing challenges.

"This is not unique to the hospitality industry. It dips into healthcare and manufacturing and IT and you name it. I think everyone's having a challenge right now," Somers said.

The state's Meals and Rooms tax is also applied to car rentals.

Contact reporter Dan Alexander at Dan.Alexander@townsquaremedia.com or via Twitter @DanAlexanderNJ